(Vietnam Investment Review)
"While the base rate is likely to be kept stable, there will be a slight increase in the market rate in the remaining months of the year, as bank are pushing mobilisation for mid- and long-term deposits," said Nguyen Dinh Tung, Maritime Bank's deputy ganeral director.
The dong deposit race, after a few weeks of cooling down, has heated up again as a series of banks lauched new products with higher than 10 percent, per annum interest rates to attract depositors, triggering concerns over banks' liquidity.
However, bank representative have played the concerns with a straight bat.
"I do not think banks are encuntering liquidity problems. Indeed, they are going on more stable operations and the interest increases are just part of nomail development plans," said Tung.
Tung said even if the central bank had issued compulsory bills to draw out money from the maket to avoid high inflation risks, which it had said it would not do, there would not be a problem.
"One year ago, the base rate was at 14 per cent and many banks had pushed deposit rates to 17-18 per cent, per annum. Many of those high interest rate doposits will have matures at the end of July, so now banks have prepare for that," said Ngo Xuan Dung, general director of Vietnam International Bank's Ho Chi Minh City branch.
Dung said invreased interrest rates and more utilities for deposits were necessary to keep customers from jumping ship or into other attractive investment channels, as well as to attract new accounts to enhance liquidity.
Meanwhile, HDBank general director Nguyen Thi Phuong Thao said the deposit race would enhance market competitiveness.
The bank on july 24 raised the dong deposit interest rate on 36-month terms to 10.2 per cent per annum, touching the market peak that had been set up by the Vietnam Tin Nghia Commercial Joint Stock Bank nearly one month ago.
On the same day, Saigon Commercial Joint Stock Bank (SCB) lanunched the "automatically increased interest rate" product, with up to 10 per cent per annum for 13-24 month terms.
Previously, Oricombank introduced the "summer savingsbonus increases" programme, with its highest rate at 10.1 per cent per annum for 36 month long deposits.
While the highest rates at SHB and ABBank ranged from 9.65-9.99 per cent, those in some big banks, including Vietcombank and Vietinbank, also jumped up to nearly 9 per cent.
The room to raise deposit rates is limited, as the lending interest rate cap has not been removed, so banks have also come up with new utilities for deposit products, including SHB's bonus interest rate policy and SCB's forum for depositors.
According to a State bank report last week an upward trend was also seen in trading interest rates for most inetr-bank market terms, with the highest marginal increases being for six-month terms.
By Quynh Anh
