Banks pushing preferential rates to boost year-end credit growth

Vietnam International Commercial Joint Stock Bank (VIB) has just launched a VND2 trillion ($96 million) credit package with a concessionary rate of 0.68 per cent per month (10.32 per cent per year) guaranteed for a period of 30 months.

As of the 31^st month, the interest rate will equal 4 per cent more than the savings account rate for 13 month term deposits in Vietnam dong.

The package is aimed at supporting individual customers in renovating or buying houses and boosting consumption.

According to VIB Retail Banking director Rahn Wood, on top of proof of basic income, applicants can also report other income sources such as dividend and trade incomes to prove their payment ability.

“This is one of our efforts to support customers with real need for capital,” he said, adding that about VND400 billion ($19 million) of the $96 million package has been disbursed after about a half month from launching.

Similarly, Orient Commercial Bank (OCB) recently offered individual customers a preferential credit package with a stable yearly interest rate of just 9.99 per cent for a 36-month period.

“This 36-month term is to ensure customers are relaxed in their banking relationship with us, given that many banks are only offering preferred interest rates for the first year of a loan, after which the rate is undefined,” said Truong Dinh Long, the bank’s deputy general director.

In another move, Asia Commercial Bank (ACB) has launched a preferential credit package of 7 per cent per year for both individual and corporate customers through the end of the year.

Loan applicants will be notified of whether they have been approved within 24 hours of the bank receiving their full records.

As well as preferential interest rates, many banks are also offering borrowers the chance to win valuable prizes such as overseas trips, gold and diamonds.

According to Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City branch, the city’s credit grew by only 7.5 per cent by the end of October this year. And with the government’s goal of 12-14 per cent by the end of the year, the pressure to boost disbursement is extremely strong and is a high hope with only two months left to go.