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Banks cut lending interest rates to lowest level in years



Banks have cut lending interest rates, now at the lowest levels in many years, to help people and businesses hit hard by Covid-19.

Banks cut lending interest rates to lowest level in years

Vietcombank, for example, has cut lending interest rates and fees for clients from Bac Giang and Bac Ninh provinces, the two Covid epicenters, from June 1 to August 31, 2021.

The bank has slashed interest rates by 1 percent on VND loans and 0.5 percent on foreign currency loans. These are applied to all outstanding loans and new loans to people and businesses in the two provinces.

It also reduced by 50% bank fees for businesses and exempted basic fees for individual clients.

In early April, Vietcombank launched a series of preferential loans targeting individual clients, funding their purchases of cars and houses, and the demand for working capital of SMEs.

The loans have the interest rate of 6.79 percent per annum for the first six months, or 7.29 percent for the first 12 months.

Individual clients who receive their salaries via Vietcombank can borrow money from the bank at a rate 0.1 percent lower than normal interest rates.

BIDV launched a new 2021 medium- and long-term credit package, worth VND50 trillion on May 25. The lending interest rates of the package are 0.6 percent lower than earlier this year and 1 percent lower than the same period last year.

BIDV previously launched a VND10 trillion credit package with interest rates of 3.8-5.5 percent (3-month loan), 4-6 percent (3-6 month loans) and 4.5-6.5 percent per annum (6-9 month loans), applied from February 24 to September 30, targeting SMEs.

VietinBank has announced the extension of its preferential lending program until June 30, 2021.

BacABank last month launched a ‘super preferential loan package’ for business clients, worth VND3 trillion.

The interest rate is 7.5 percent for clients with debt acknowledgment contracts of less than six months and 7.7 percent for six months.The program on exemption account service fee has been extended until the end of June 30, applied to the first three months. Clients will enjoy a preferential service fee for the next three months.

MSB in May also launched a program on lending to import/export clients with the interest rates of 6 percent per annum for Vietnamese dong and 3 percent for US dollar loans.

In April, ABBank ran three preferential packages with the credit limit of VND1 trillion with interest rates from 4.4 percent. Small and medium sized enterprises, and micro enterprises, can borrow money to buy foreign currencies to make payments to foreign partners or other foreign currency loans.

HDBank’s interest rate has fallen to 3 percent per annum, which is reserved for individual clients and micro businesses. The package, worth VND3 billion, offers a grace period of six months.

Vietbank has launched the programs ‘Joining hands with businesses 2021’ and ‘Connecting import/export businesses 2021’ with preferential interest rates of 6.5 percent per annum.

The bank has also promised exemption of fees for businesses that pay debts before they become due, and a 50 percent reduced fee for international payment service.

The State Bank of Vietnam (SBV) has slashed fees for credit institutions, which creates favorable conditions for banks to cut lending interest rates, thus making it easier for people and businesses to access credit, which helps to reduce black credit.

Individual customers can borrow at an interest rate of only 6 percent per annum for the first three months, and 7 percent for the first six months. The total credit limits are VND1 trillion for short-term and VND2 trillion for medium- and long-term packages.

Many other banks, including TP Bank, Sacombank and HDBank, committed to cut interest rates in the 2021 shareholders’ meeting season.

Lending interest rates

The average lending interest rates are now at the lowest levels of many years.
The short-term lending interest rate of state-owned banks’ dong loans is 5-6 percent, while it is 7-8 percent for medium and long-term loans.

The interest rates offered by joint stock banks are a little higher, but they offer specific preferences for different groups of clients.

Though the lending interest rates have decreased sharply, they still could be reduced further, according to experts.

They pointed out that the lending interest rates are decreasing more slowly than deposit interest rates.

SSI reported that the latter fell by 2-2.5 percent in the last year, while the former fell by 1-1.5 percent only.

SSI believes that if the deposit interest rates stay firmly at low levels, banks have every reason to cut lending interest rates further.

Vietcombank Securities also thinks that since deposit interest rates are stable, lending interest rates will continue to decrease.

The State Bank of Vietnam (SBV) has slashed fees for credit institutions, which creates favorable conditions for banks to cut lending interest rates, thus making it easier for people and businesses to access credit, which helps to reduce black credit.

However, some experts warn that if the inflation rate increases, lending interest rates are not likely to decrease considerably. In principle, interest rate policy needs to be commensurate to inflation performance to ensure macroeconomic stability.

The recent interbank interest rate increase has also raised concern that this would lead to a commercial interest rate hike. 

Tuan Dung



Excited but anxious: Hanoi business owners reopen



Though they eagerly reopen after being closed for 27 days due to the Covid-19 outbreak, many Hanoi businesses are also worried about changing consumer behaviors.

Closed restaurants inside a shopping mall in Ha Dong District, Hanoi, June 20. Photo by VnExpress/Duc Minh.

Closed restaurants inside a shopping mall in Ha Dong District, Hanoi, June 20. Photo by VnExpress/Duc Minh.

After Hanoi authorities announced that indoor dining and hairdressing can resume on Tuesday, Bui Quang Hung, co-founder of barber shop chain 30Shine, showed his excitement with a post on social media saying, “see you Hanoians on Tuesday morning.”

He said the shops would open from 7.30 a.m. until late night to clear a backlog of almost a month.

“Men have to visit the barber once every three weeks on average because they feel irritated if their hair is one to two centimeters too long.”

There would be two or three times the usual number of customers for two weeks, he said based on his experience from previous waves.

But some other businesses are less hopeful.

Trieu Nguyen Quan, owner of the Goofoo Gelato chain of ice cream shops, does not expect many customers for 10 days after reopening since people are afraid of the pandemic.

Hoang Tung, CEO of fast-food restaurant chain Pizza Home, said the outbreak could cause him to lose a number of customers since people have adopted a new habit of eating at home.

To survive the stop-start nature of their business amid the pandemic, many have sought to improve their business model. Tung said Pizza Home has closed some stores that were not doing well but has expanded into home delivery and apps.

“The restaurants have to operate both online and offline, and must be prepared for the worst, which is closure, amid the pandemic.”

Goofoo Gelato too has managed to pull on thanks to online sales.

Quan said he plans to increase the number of outlets but only after vaccination. He said vaccination is the only way to make him feel secure and the ultimate solution for businesses to open and the economy to revive.

Around 2 percent of the population has received the first shot, and 0.1 percent has received both.

Vietnam has received delivery of around three million vaccine doses so far, and is expected to get over 120 million this year.

It seeks around 150 million in all to cover 70 percent of its population.


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Market falls on strong selling forces



A worker collecting latex in a rubber plantation of Vietnam Rubber Group (GVR)’s member in Chư Păh District, Gia Lai Province. The company shares posted the biggest losses yesterday. — /VNA Photo

HÀ NỘI — Shares inched down on Wednesday, weighed by strong selling pressure across most sectors despite gains in some large-cap stocks. 

The market benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) declined by 0.22 per cent to 1,376.87 points. The market’s breath stayed negative with 298 stocks falling, while 94 stocks rose and 51 ended flat. 

The liquidity was high as more than 710.77 million shares were traded on the market, worth over VNĐ21.1 trillion (US$528.6 million).

The market was weighed by selling forces despite rallies in large-cap stocks, especially bank stocks. 

The VN30-Index, which tracks 30 biggest stocks in market capitalisation on HoSE, climbed slightly 0.02 per cent to 1,489.53 points. Twenty stocks of the VN30 basket plummeted, while only nine jumped and one stayed unchanged. 

Stocks in many sectors posted negative performance yesterday with material stocks leading the market’s trend. Vietnam Rubber Group (GVR) witnessed the biggest losses, down 2.47 per cent, followed by No Va Land Investment Group Corporation (Novaland, NVL), Vingroup JSC (VIC) and Mansan Group (MSN), down 0.5 – 1.57 per cent.

However, the losses were limited by gains in bank stocks. Of which, Vietcombank (VCB) was the biggest gainer in the market, up 1.95 per cent. Other stocks witnessing big increases were Vietinbank (CTG), VPBank (VPB) and Saigon Beer – Alcohol – Beverage Corporation (SAB), up more than 1.5 per cent. 

The market has fluctuated since the beginning of the week with alternative up and down sessions. 

Analysts from Saigon – Hanoi Securities JSC (SHS) said that based on Elliot Theory, there is still room for an upward trend with a resistance level of around 1,400 points. 

Investors who took profits last week should refrain from opening long positions at the current price and wait until the market corrects deeper to come back, SHS added. 

On the Hà Nội Stock Exchange (HNX), the HNX-Index plunged 0.41 per cent to 315.8 points. 

During the trading session, more than 126.2 million shares were traded on the northern bourse, worth nearly VNĐ3 trillion. 

Meanwhile, foreign investors returned to the market as they net bought a value of VNĐ159.5 billion on both exchanges. Of which, they net bought a value of VNĐ144.44 billion on HoSE, and a value of VNĐ15.06 billion on HNX. —


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Local stocks experience gloomy trading day



An investor browses his mobile phone while sitting in front of stock information screens. The local stock market ended lower today, June 23 – PHOTO: VNA

HCMC – Thanks to the support of securities stocks and largecaps in the banking sector, the benchmark VN-Index of the HCMC stock market only fell slightly amid lackluster trading today, June 23.

At the close, the main index shed 3.1 points, or 0.22% against the previous session at 1,376.87, with 94 stocks rising and up to 298 others dropping.

Turnover on the southern bourse continued its downward trend, contracting 4.8% in volume and 5.7% in value at over 710 million shares and more than VND21 trillion. Shares traded in block deals contributed VND2.050 trillion to the overall value.

In the group of bank stocks, largecaps extended rally which helped the VN-Index to avoid a deep decline.

Private lender VPB was the biggest winner as it soared 4.5% with 30.7 million shares changing hands. Also, State-owned lender VCB added 2%, and its fellows CTG and BID rose 1.5% and 0.9%, respectively. TPB, ACB, and TCB increased slightly by 0.4-0.8%.

Meanwhile, lender LPB was the biggest loser, dropping 2% to its intraday low. Similarly, lenders SSB and EIB lost around 1%.

Many securities stocks maintained their good performance, with HCM surging 3.6%, VDS improving 2.6%, CTS edging up 1.4%.

A lot of fuel and property stocks ended deep in the red.

Among speculative stocks, while a host of them suffered from huge losses, investment firm FIT hit its upper limit, real estate firms SCR and IJC rose slightly.

Property developing group FLC recorded the third straight losing session with a 5.8% drop, but it led the HCMC market by liquidity with 47 million shares changing hands.

On the northern bourse, the HNX-Index lost 1.29 points, or 0.41% over the session earlier to close at 315.8, with 73 advancers and 133 decliners. Over 126 million shares worth more than VND2.8 trillion were transacted on the bourse, falling 22.9% in volume and 21.7% in value versus the previous day.


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