Banks agreed to keep interest rates stable

At the meeting, Mr. Nguyen Hoang Minh, Deputy Director of the SBV’s Branch in Ho Chi Minh, briefed the Deputy Governor on the results of the banking performance in Ho Chi Minh city. Accordingly, by end of Jully, 2018, the total mobilized capital of all credit institutions in Ho Chi Minh city reached VND 2,150 trillion, an increase of 7.2% as compared to the same period of 2017, of which the mobilized capital in VND and in foreign currencies accounted for 89.3% and 10.7% respectively. The proportion of mobilization from individuals accounted for 48.7% out of the total mobilized capital.

Regarding lending operations, by the end of July 2018, the total loan capital was about VND 1,930 trillion, up by 9.47% as compared to the same period of last year, of which the amounts of loans in VND and in foreign currencies were 90.9% and 9.1% respectively out of the total lendings. The ratio of medium and long terms lendings was 53.2% out of the total outstanding loans.

With regards to the evaluation of the SBV’s Branch in Ho Chi Minh city, the banking performance in July had achieved several important results. Accordingly, the most important and useful factor supporting for enterprises and the economy was the stability of the interest rates for both mobilizing and lending operations. Despite facing various negative impacts, the exchange rate of the VND against the USD was maintained relatively stable, the demands and supplies of foreign currencies were ensured at a proper level, meeting sufficiently the demands of the enterprises and the citizens. Over the last 7 months, the outstanding credit saw a positive growth, the structure of credits was more and more appropriate with the proportion of medium and long terms loans on the downward trend and the commercial banks focusing more resources for production and business. Basically, the liquidity of the banking system was ensured and the credit institutions strictly complied with the applicable regulations issued by the SBV.

At the working session, Deputy Governor Dao Minh Tu also chaired the discussion on some key issues, such as measures to stabilize the loan interest rates, the proportion of credits in foreign currencies, credits for the priority fields and other critical sectors in Ho Chi Minh city, and received the unanimous agreement from the commercial banks. The leaders of several commercial banks raised their opinions that the reduction of the loan interest rates, in case that there is a need to do so, should be calculated and applied for certain sectors and industries only. Basically, keeping stable the current interest rates for both mobilizing and lending operations is appropriate under the macroeconomic conditions and can ensure the safe and sound performance of the banking sector. The credit institutions should accelerate more efficient measures to review and inspect their loans in order to classify and make accurate statistics data of their outstanding loans for every sectors in order to minimize the risks.

For the remaining months, the Deputy Governor requested the SBV’s Branch in HCM city and the local commercial banks to continue to focus on the restructuring of the credit institutions and take it as one of the most priority tasks. The SBV will continue to keep the interest rates stable and will not request or consider to request any increase or reduction of the interest rates for neither lending nor mobilizing operations in the near future. Therefore, the commercial banks should take a proactive stance in managing their credit growth in close linkage with the their capital adequacy ratios. For the priority and breakthrough sectors in Ho Chi Minh city, the Deputy Governor required commercial banks to conduct effective actions to help connect the enterprises with the banks and provide the needed credits to meet the practical demands of the market.

MH