A number of commercial banks have lowered their interest rates on savings accounts by 0.1-0.4 percentage points in order to offer loans at a lower interest rate to businesses and individuals affected by the COVID-19 outbreak.

HDBank is offering low-interest loans and has waived fees on international payments
for businesses that supply drugs and medical equipment (Photo courtesy of HDBank) 

As of March 6, ABBank had lowered its interest rate on savings accounts from 7.9% to 7.7% a year for 18-36 month terms. For 12-month term deposits, the interest rate dropped by 0.2% to 7.6% per year.

For one- to three-month term deposits, the ceiling interest rates were adjusted from 5% to 4.8%.

For 12-month term, the interest rate on deposits made at the counter decreased from 6.3-7% to 6.1-6.8%, depending on the amount.

In addition, as of March 3, the deposit interest rate at VPBank dropped by 0.05-0.15% for terms of six months or longer. 

The 12-month term deposit interest rate has dropped to 6.9-7.1% (deposits made at the counter) and 7-7.1% per year (deposits made online). 

VBBank’s highest deposit interest rate of 7.7% has dropped to 7.55% per year, for 18 months or longer term, with amounts over VND5 billion.

Eximbank on February 28 also reduced deposit interest rates by 0.1-0.4 percentage points. 

The 36-month term deposit interest rates for customers depositing at the counter fell from 8.4% to 8%. For 12- and 15-month terms, the rate dropped by 0.2 percentage points to 7.4% and 7.8%, respectively.

Experts said the drop in deposit interest rates would continue as many countries’ central banks have also done so, including the US Federal Reserve, which cut deposit rates by 0.5 percentage points.

According to a recent report from Bao Viet Securities Joint Stock Company (BVSC), deposit interest rates have decreased slightly due to the impact of COVID-19. 

According to BVSC, because of the epidemic, demand for loans is expected to decline. Credit in the first two months of the year increased by only 0.77% compared to 1.07% in the same period last year. The deposit interest rates may continue to drop in the coming time, but not significantly.

“If the epidemic continues to affect production and service activities, deposit interest rates will continue to fall so that lending interest rates can drop,” BVSC said.

Recently in response to the State Bank of Vietnam’s appeal, a number of credit institutions have announced plans to support businesses affected by the novel coronavirus epidemic.

For example, BIDV reduced the lending interest rate by at least 1% per year for loans in Vietnamese dong and 0.5% per year for US dollar.

At Saigon - Hanoi Commercial Joint Stock Bank, customers are entitled to a reduction of lending interest rates of up to 1.5% per year for loans in Vietnamese dong and 0.5% per year for US dollar loans.

Kienlongbank has cut its loan interest rate by 3 percentage points for farmers growing dragon fruit, watermelon, durian, jackfruit, mango, rambutan and banana between February 1 and April 30 this year. It will also waive penalties on overdue loans of borrowers affected by the COVID-19 outbreak.

HDBank is offering low-interest loans and has waived fees on international payments for businesses that supply drugs and medical equipment.

In addition, ABBank has launched a loan support package totalling VND4 trillion at low interest rates for affected businesses. It has also conducted a review of its credit portfolio, especially accounts of enterprises with trade relations with China, and will offer them timely advice via phone or email.

 The Government plans to provide a VND250 trillion (US$10.78 billion) low-interest credit support package and a fiscal support package of nearly VND30 trillion to support individuals and businesses affected by the epidemic.

 The State Bank of Vietnam has urged credit institutions to maintain enough funds to meet credit demand and support customers affected by the outbreak.

 Speaking at a recent meeting, Le Minh Hung, the central bank governor, urged banks to keep a watch on the business situation of customers who could be affected by the epidemic and evaluate the possible impact. 

 The central bank has also instructed credit institutions nationwide to work with local authorities to resolve problems faced by affected businesses and borrowers.