Lending interest rates rose in November, with 3/4 of the Big4 banks joining the trend.
Average lending interest rates in November showed a widespread upward trend, with 15 out of 23 banks adjusting their rates upwards, including 3 members of the Big4 group.
According to data updated on December 21st, the average lending interest rate in November showed a tendency to rise again after a long period of remaining at a low level. Notably, this trend also occurred among the four largest commercial banks (Big4), reflecting increasing pressure on capital costs across the entire system.
Developments within the Big4 group
Among the Big4 banks, 3 out of 4 recorded an increase in average lending interest rates in November compared to October, with only BIDV maintaining the same rate.
- BIDV:The average lending interest rate remained unchanged at 5.47% per annum. The net interest rate spread was 1.29% per annum.
- Vietcombank:The average lending interest rate increased slightly by 0.1% per year, to 5.7% per year. The net interest rate spread was 1.2% per year.
- Agribank:The average lending interest rate increased from 6.44% per year to 6.69% per year. This marks the second consecutive month that the bank has recorded an upward trend.
- VietinBank:The average lending interest rate increased by 0.03% per year, to 5.1% per year.
Despite upward adjustments, the Big4 group of lenders still maintains some of the lowest lending interest rates in the market thanks to their economies of scale and lower funding costs.
The upward trend is dominant.
Statistics from 23 commercial banks show that as many as 15 banks increased their average lending interest rates in November. Besides the Big 4, other prominent banks that also adjusted their rates upwards include VIB, GPBank, BVBank, LPBank, MB, Sacombank, and ACB.
Conversely, only six banks recorded a decrease in interest rates, including KienlongBank, OCB, Techcombank, PVCombank, BaoViet Bank, and MSB. However, some banks in this group, such as KienlongBank, PVCombank, and BaoViet Bank, still maintain average lending interest rates above 8% per year, among the highest in the market.
Saigonbank maintained its average lending interest rate at 8.7% per year, which is also one of the highest rates announced.
Pressure from funding costs
The upward trend in lending interest rates is believed to be a direct consequence of the race to increase deposit interest rates that has taken place over the past three months. As input costs rise, banks are forced to adjust lending interest rates to ensure profit margins.
According to the State Bank of Vietnam's report on the interbank market for the week of December 8-12, the average VND interest rates also showed a slight upward trend across key maturities. Specifically, overnight, one-week, and one-month interest rates increased to 7.35%/year, 7.44%/year, and 7.06%/year, respectively. Meanwhile, the average interest rates for USD transactions tended to decrease slightly.
