Local businesses borrow at any costs for booming time at yearend

A cash teller (left, in blue) talks with a client at the Asia Commercial Bank (Photo: Minh Tri)

At some commercial banks, deposit rates reached 15-16 per cent per annum last week, while lending rates for businesses and individuals are up to 17-19 percent and more than 19 per cent.

Some small and medium enterprises disclosed lenders’ current lend rates remained much lower than unofficial sources’ ones, which can be up to 3-4 per cent per month or 48 per cent per annum.

High interest rates showed commercial banks’ credit growth last month was a little bit slower than previous months, according to Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City branch.

He expected the banks’ more steady liquidity combining with local firms’ large demand for capital this month will put the growth rate back on track.

However, the central bank’s HCMC branch noticed in a report that interbank rates still reply mainly on the state-owned lenders. Commercial banks and financial firms are often clients of the state-run lenders. The interbank rates therefore will increase rapidly if  the state-owned banks, in some cases, refuse to give loans to commercial lenders, the report said.

The state-owned lenders mostly have to say no to commercial banks or financial firms, whose plans on using capital are risky and unreasonable.

Economists said many lenders’ growth rates nearly reach their annual target, so they will be unwilling to loan more.

The credit growth rate of the Military Bank was 5 per cent higher than October’s rate and rose 50 per cent so far this year. The lender had to slow down last month’s growth rate as they were afraid it would surge over this year’s target, an officer at the bank said, without providing how much the targeted rate is.

The state bank’s HCMC branch expected credit growth rates this year would rise 25 per cent year-on-year to VND699.81 billion ($35 million), and the deposit would increase 27 per cent year-on-year to VND766.25 billion ($38.3 billion).

However, some banks will likely to miss their target. Asia Commercial Bank, known as ACB, said the number of personal loans was small because of the high interest rates. Other commercial lenders said they still accepted personal loan applies, but would offer the loans next year.