Slower mobilization than credit may put pressure on interest rates

Accordingly, deposits from the residential sector increased by 6.5% compared to the beginning of the year, reaching 6.96 million billion VND. Deposits from economic organizations increased by 3.43%, reaching more than 7.07 million billion VND.

The mobilization rate of banks in the first 9 months of this year was still much lower than the same period in 2023 at 7.3%.

However, capital mobilization has improved significantly in the third quarter of 2024, as revealed from the State Bank, capital mobilization of the whole industry by the end of June 2024 only increased by about 1.5% compared to the beginning of the year.

Capital mobilization speed is slower than credit. Photo: ST

Previously, according to the State Bank, as of September 30, 2024, credit increased by 9% compared to the beginning of the year. According to the latest announcement, as of December 7, 2024, credit has reached 12.5%.

This means that the capital mobilization speed was slower than credit. According to experts, this situation has generated the big gap between outstanding loans and deposit balances.

A report by Vietcombank Securities Company (VCBS) stated that the above situation could put pressure on the mobilization interest rate level, especially at small-scale banks.

According to market records from banks, since the beginning of the month, 6 banks have increased interest rates, including: Dong A Bank, ABBank, IVB, TPBank, GPBank and MSB.

On the contrary, groups of Bac A Bank, ABBank, VIB, IVB and LPBank have reduced interest rates.

Although 12-month deposit rates have increased by an average of nearly 1 percentage point from their March 2024 low, four state-owned banks (Vietcombank, BIDV, Agribank and VietinBank) have maintained the lowest long-term deposit interest rates on the market, at 4.7-4.8%/year over the past several months.

Meanwhile, the mobilization interest rate at large-scale joint-stock commercial banks is around 5-5.5%/year, and at smaller joint-stock banks is around 5.5%-6%/year...

Some banks have even raised their deposit interest rates to 7-9.5%/year, but this rate is only applied with the deposit amount up to thousands of billions of VND.

Average deposit interest rate (Unit: %). Source: VCBS

Economist Dr. Dinh The Hien commented that although the mobilization interest rate has witnessed upward trend, the market has not seen a situation of attracting cash flow by racing for high interest rates like in previous years.

Currently, the VND interest rate at 5%/year is reasonable and stable, thereby contributing to stabilizing the capital market.

According to recent information from the State Bank, the average lending interest rate of domestic commercial banks for new and old loans with outstanding debt is at 6.7-9.1%/year.

The average short-term lending interest rate in VND for priority sectors is about 3.8%/year, lower than the maximum short-term lending interest rate as prescribed by the State Bank (4%/year).

However, according to Dr. Hien, deposit interest rates in developed countries are very low, only slightly higher than the inflation rate.

In Vietnam, the 12-month savings interest rate at four state-owned commercial banks fluctuates below 5% per year, a very reasonable interest rate, with a difference of about 1% compared to inflation.

The good news is that keeping the mobilization interest rate low will create more room to stabilize the lending interest rate.

At the regular Government Press Conference on December 7, 2024, Deputy Governor of the State Bank of Vietnam Dao Minh Tu also said that the mobilized capital in 2024 is guaranteed to be harmonious, and the output interest rate has decreased positively. Up to now, the average lending interest rate has decreased by 0.96% compared to the beginning of the year.

Therefore, the VCBS report forecasts that in the context of controllable inflation, the upward trend of the exchange rate has slowed down, the pressure on the interest rate level has decreased, so the interest rate may be stable and move sideways in the coming time.

Regarding lending interest rates, according to VCBS, credit quality and lending interest rates are still closely monitored by the State Bank of Vietnam.

Accordingly, VCBS expects the lending interest rate level to be maintained at a low level to support businesses according to the Government's orientation.

However, there is still differentiation between industries and businesses, as well as risk appetite among commercial banks today.

Specifically for 2025, experts from VPBankS Securities Company predict that mobilization interest rates may increase slightly or remain unchanged, depending on economic developments and the monetary policy of the State Bank of Vietnam.

The differentiation in interest rates among banks will become clearer, as well as be affected by factors such as the level of economic recovery and inflation.

VPBankS believes that this will be a stable but challenging year for banks in balancing capital mobilization and profits.