Businesses worry about rising interest rates

Many joint stock banks continued to increase deposit interest rates by 0.2-0.3% last week, causing businesses to worry about loan interest rates increasing as well.

The leader of a garment company in Tan Tao Industrial Park, Ho Chi Minh City, said that at the end of 2015, his company borrowed 10 billion VND from the bank to expand production with an interest rate of 10% per year and adjusted after one year.

This person said that with the current interest rate, the company can bear it, but in just about a month, the bank will apply the floating interest rate. "With the input at some banks increasing slightly recently, I am afraid that the lending interest rate will be adjusted up and thus will negatively impact the product price and business activities of the enterprise," he worried.

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The director of an agricultural processing and exporting company in Ho Chi Minh City also said that in the current difficult economic context, it is not easy for businesses to achieve a profit of 10%. "If the lending interest rate increases higher than this level, businesses will not be able to bear it," he said.

Talking to VnExpress, Mr. Pham Ngoc Hung, Permanent Vice President of the Ho Chi Minh City Business Association analyzed that currently, businesses can be divided into three groups: highly trusted, low trusted and untrusted. Accordingly, the group of untrusted businesses is almost unable to access loans from banks, so they mainly mobilize capital from employees, friends, relatives...

As for high and low credit rating groups, they can easily borrow from banks but will have to pay different interest rates. For businesses with good ratings, the lending interest rate in the first year is currently around 8-10% for medium and long term (after that, it will float according to the market). As for businesses with low credit rating, they have to borrow at a relatively high average rate of 11-12% per year.

Sharing about this issue, General Director of HSBC Vietnam - Pham Hong Hai said that lending interest rates have decreased slightly since the beginning of the year. However, he admitted that the market is currently divided into two very clear customer groups. One group is good customers, and banks are competing fiercely to attract these customers with low interest rate policies. "Banks even accept lending to good businesses with interest rates equal to or lower than deposit interest rates," said Mr. Hai.

As for the small and medium-sized customer group, with difficult operations... the General Director of HSBC Vietnam said that the bank is a bit "hesitant". Because for this group of customers, if banks lend, they will have to pay relatively high interest rates to compensate for the risks.

Regarding the recent increase in deposit interest rates by some banks, according to Mr. Hai, it may just be a move to rebalance capital sources and the loan-to-deposit ratio. In reality, some banks have quite high loan-to-deposit ratios, so they have to increase deposits (increase interest rates) to reduce this ratio to ensure safer liquidity.

"However, this is only a small number. The rest, most other banks maintain low deposit interest rates, so lending interest rates in the coming time will be stable and not fluctuate much," Mr. Hai predicted.

According to VNE