Vietnam Banking News

Advertisements

Random Post

• BCI Asia gives architecture awards
• FPTs earnings to rise 20 percent
• Ninh Thuan has issued a list of 54 projects capitalized at VND38.67 trillion
• Capital abundant at some banks and deficient at other banks
• Build Tramway in Ho Chi Minh city
• Finnish investors find Vietnam promising

Vietnam Banking News

Vietnam Business » Vietnam Banking News » Vietnam Banks lament slowing mobilization

Vietnam Banks lament slowing mobilization

Although banks launched many promotion programs this year, they said mobilization growth was still lower than expected due to the 10.5% cap on Vietnam dong borrowing rates.

Many banks said that the cap had negatively affected business, as they could not quote higher borrowing rates to attract depositors. As a result, many banks had to launch promotion programs that increased the borrowing rates too.

Saigon Commercial Bank (SCB) has launched eight programs since early February including customer care, increasing rates, or lucky draws to attract depositors.

The bank introduced a new program on Monday that will last until April 29 giving customers who deposit Vietnam dong and U.S. dollars one to 60 month terms. In this program, customers can receive cash equivalent to 0.6% per year in Vietnam dong and 0.24% per year in dollars. In addition, customers can also receive a one-tenth SJC gold tael for every VND2 billion or US$120,000 deposited.

Asia Commercial Bank (ACB), the leading lender in joint-stock banks, will join the race too, launching its own incentive programs. The bank launched a promotion program on Monday for depositors. The total prize value is VND2.5 billion.

Ly Xuan Hai, CEO of ACB, said that since the Tet Holiday, the banks mobilization growth was unstable and had just focused on short terms.

Meanwhile, Cao Van Duc, deputy general director of Soc Trang-based Vietnam Thuong Tin Commercial Bank, said its mobilization increased 10% from late last year, but the figure was much lower than the banks expectation.

Therefore, commercial banks have asked the central bank to remove the borrowing ceiling rate. The State Bank of Vietnam has not moved on this issue yet because the Vietnam Banks Association set the ceiling and if any bank breaks that level, the central bank will be obliged to investigate.

To diversify mobilization and not rely on public savings, banks have tried to issue bonds or increase the rate in U.S. dollars, which does not have a capped ceiling rate. Therefore, banks have encouraged customers to shift to dollar loans for lower rates as well as to reduce demand on Vietnam dong loans.

Tran Xuan Huy, general director of Sacombank, said in the banks general meeting on Monday that Sacombank planned to increase its mobilization by 48% in 2010 but it would be difficult. Huy added that besides strengthening its banking products sales team, Sacombank would also access foreign institutions to borrow middle and long-term capital. The bank will also consider issuing bonds to ensure a stable capital source in the future.

This years capital shortage is mainly due to banks strongly increased credit last year, which was much higher than their mobilizing ability. Last year, banks credit growth was nearly 38% while mobilization increased only 28.7%. Meanwhile, in the first two months this year, the central bank said mobilization of the banking system declined 0.17% while credit grew 1.4%.

Vietnam Business And Financial News Network. Source [english.thesaigontimes.vn]

More Vietnam Banking News:

• Vietinbank seeks joint venture bank with Qatar
• Bank refuses to sell dollars to client
• Standard Chartered Bank: Vietnams growth rate could be 6.7%
• aritime Bank in deal with IBM Vietnam
• MoneyGram expands network with Sacombank
• Lien Viet Bank expands agricultural credit
• OCB invests US$1.7 mil. to develop bank card network
• BIDV gets green light on Myanmar office
• World Bank seminar on global awareness after economic crisis
• Banks race to meet new capital rules

Popular Vietnam Business News

Tasco plans to raise chartered capital to 135 billion dong

In details, the company will issue 5.5 million shares for existing shareholders with par value of 10,000 dong per share, under the ratio of 1:1 or one old share for

Vinashin Affiliate Launches First Car-carrying Ship

. Ha Long Shipbuilding Company, an affiliate of Vietnam Shipbuilding Industry Group (Vinashin), launched a 70,000 DWT car-carrying vessel on Tuesday, July 21 in the northern province of Quang Ninh.

Tolls proposed on cars using downtown streets

The citys Tien Phong Technology Joint Stock Company has proposed starting toll collection on cars using downtown streets from January 2012 with a fee level from US$1 to US$2, or

Vietnam hub recalls milk with content deficiencies

Health inspectors in Ho Chi Minh City on Wednesday ordered the recall of five milk products that did not contain the quantity of protein announced on their labels, and suspended

Leap in exports pushes trade deficit to $5.4b in five months

The countrys trade deficit reaches US$5.4 billion in the first five months of the year, according to experts from the General Statistics Office (GSO). The trade deficit was equivalent to

World Bank Predicts US$2.6B Surplus in Vietnam Balance of Payments in 2010

An excess of US$11.7 billion in the capital account will help Vietnam cover a shortfall of US$9.1 billion in the current account this year, the Hanoi-based Chief Economist Martin Rama

HCM City holds global marketing expo

The countrys first-ever International Advertising Equipment and Technology Exhibition opened August 5 in HCM City. The three-day event, Vietad 2010, has attracted more than 150 booths and nearly 70 domestic

Businesses weary of revised automatic import license procedure

Long Quoc Trung, Director of Matsu Electronics, a distributor of refrigeration equipment from Malaysia, said he is nervous because after two weeks, he still has not got confirmation of his

Advertisement