Banks want to lower interest rates to boost business
  • By Nguyen Hien | | October 14, 2013 08:44 AM

Credit institutions are expecting interest rate to be lowered 1% this year, according to the State Bank of Vietnam's Department of Monetary Forecast and Statistic.

 Interest rates indication of hope for banks

Even though the economy and business environment have not improved from the previous quarter, both domestic and foreign credit institutions in Vietnam hope for better changes in the last quarter of this year.

Surveys conducted in June indicated that customers' finance and business situations remain the key factors to the banks' operation. However, the decreasing credit demand is also one of the big challenges to banks' credit growth rate.

To encourage customers to borrow money and use banking services, it is hoped that lending interest rates will remain stable or to be lowered by 1% in the last quarter.

The credit institutions also forecast that deposit accounts and outstanding loans for 2013 will increase by 10-20%, in which the rate of accounts and outstanding loans in VND will be higher than in foreign currencies. The institutions also promised to continue to give preferential loans in accordance with government's directives.

In addition, 50% of institutions said they have increased the amount of individual consumer loans outstanding until the end of 2013; 36.6% have shifted focus onto FDI enterprises and 40% have cut the amount of outstanding loans to real estate sector for the rest of this year.

Despite the tough times, over 80% of institutions maintained operations or hired new staff, preparing for when the situation improves.

They do not hold much hope for a breakthrough development this year but hope that their business will improve a little after many stimulus projects and plans to control bad debts are implemented.

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