Banks race to grab customers

For instance, ABBank is slashing 2 per cent lending rates to individual customers in the first three months.  In the meantime, when taking on loans, customers have a chance to win complimentary coupons worth VND10 million ($476) for furniture purchases or get bank accounts having VND1-3 million ($47-$140) surplus.

Bao Viet Bank, meanwhile, has set aside a VND1 trillion ($47.6 million) credit package to support small and medium-sized enterprises with stable interest rate 12 per cent per year for dong-denominated loans and 5.5 per cent per year for dollar loans in the first three months.

Eximbank is honouring export businesses having dollar-raising sources dong-denominated loans with attractive dollar lending rates of 7 per cent per year.

Eximbank’s third quarter consolidated financial statement shows that its total outstanding loans fell strongly to VND63.675 trillion ($3.03 billion), contracting 14.7 per cent since Eximbank scaled down lending towards risk-prone customers.

It may even slide to 20 per cent, Phuoc said, because in the past months Eximbank had ramped up efforts to take back debts eyeing rising risks.

Phuoc said that although promoting credit growth has been a constant headache to the management, Eximbank will continue to make loans in a careful manner.

Banks said credit quality was now put at top priority in a bid to rein in bad debt rates although banks possess copious capital sources.

Therefore, banks reportedly are lending each other in the inter-bank market with interest rates from 4 to 6 per cent per year and purchasing government bonds enjoying 9 per cent per year coupon rates, according to OCB general director Nguyen Dinh Tung.

“OCB’s signed credit contracts in the third quarter were positive, however capital disbursement pace remains low since firms are reluctant at production and investment expansion plans due to high inventory,” said Tung.

In this context, banks turn their attention to promoting personal loans, focusing on lending house purchases and meeting individual customers’ surging demands for shopping at year-end period.

According to a source at TienPhongBank, compared to previous years the capital demand of customers keeps rising.  But as lending rates will be set based on mobilising costs, the bank did not expect a sharp increase in its credit by the year-end.

Sharing the same mindset, HDBank general director Le Thanh Trung predicted that this year the capital demand from customers would not jump markedly despite falling lending rates. Firms are incuring high inventories, he explained, while most consumers practice thrift.