Banks adjust to balance and cut costs

After an urgent meeting with the State Bank of Vietnam (SBV) on February 25, multiple commercial banks simultaneously and significantly reduced their deposit interest rates.

Banks such as Eximbank, BVBank, KienlongBank, MSB, and VietBank have all announced new deposit rate tables, with the highest reduction reaching 0.7 per cent per annum. Deposit interest rates for several key tenors have officially fallen below 6 per cent per annum, paving the way for further lending rate cuts in the near future.

“Banks will make necessary adjustments to balance their capital structure and reduce funding costs. VietABank is committed to maintaining stable interest rates while moderately lowering medium- and long-term deposit rates to facilitate access to capital for customers, particularly individuals and small businesses, in line with government and SBV directives,” said Nguyen Van Trong, acting general director of VietABank.

Alongside deposit rate adjustments, commercial banks have also pledged to lower lending rates to support the economy. Leaders from BIDV, Agribank, BAC A BANK, and others vowed further rate reductions to help businesses and individuals access capital at lower costs.

“Agribank lowered its minimum lending rates by 0.2-0.5 per cent per annum in February. Currently, short-term loan interest rates start from 4 per cent per annum, while medium- to long-term loans start from 6 per cent per annum,” said Pham Toan Vuong, the bank’s CEO.

Eximbank has introduced a business loan package with interest rates starting at just 5.75 per cent per annum, with loan approval within eight hours to ensure timely access to capital for enterprises.

To support those obtaining affordable capital and boosting production and business activities, TPBank has launched a credit package worth up to $40 million, with preferential interest rates starting as low as 4.7 per cent. The target clientele is broader than ever, encompassing both first-time business loan borrowers at TPBank and existing customers disbursing over $120,000.

PGBank has implemented an interest rate incentive programme, offering short-term loans with rates from 5 per cent per annum for individual customers seeking to purchase real estate, invest in business, or renovate homes. Additionally, micro, small, and medium-sized enterprises can access loans with rates starting at 6.2 per cent, helping them supplement working capital and expand their operations.

Ahead of AGM season, many banks have revealed business plans for 2025, showing divergent expectations. So far, eight banks have set profit targets, with four private banks expecting double-digit growth, while the big four state-owned banks remain more cautious.

At an investor conference on February 18, VPBank’s leadership shared an ambitious business plan, targeting profit growth of 20-25 per cent, with potential for higher if economic conditions remain favourable.

Furthermore, VPBank stated that in 2025, it will continue to expand its customer base, credit scale, deposit mobilisation, and revenue across all core business segments.

“VPBank aims for 25 per cent credit growth, focusing on strategic sectors, including retail and small- and medium-sized enterprises, which are expected to grow by 30-40 per cent, while deposit growth is targeted at over 30 per cent,” said Luu Thi Thao, standing deputy CEO at VPBank.

HDBank has set a target of increasing pre-tax profit by 25 per cent in 2025 compared to the previous year, with an estimated profit of around $836 million.

“HDBank expects its net interest margin (NIM) to be approximately 5.5 per cent in 2025, slightly down from 5.6 per cent in 2024 due to pressure from rising deposit rates. Despite projected increases in funding costs, the bank will maintain reasonable interest rates to support economic growth,” the bank said.

Similarly, SeABank aims for 15 per cent credit growth, aligning with the SBV’s maximum credit growth limit, while deposit mobilisation is expected to grow by 16 per cent. The bank’s total assets are projected to increase by 10 per cent this year.

Eximbank has set an even more ambitious target, planning to grow pre-tax profit to $223 million, an increase of over 33 per cent compared to 2024. By the end of 2025, the bank aims to expand its outstanding credit to $7.82 billion, up 16.2 per cent.

On February 21, during the government’s conference with local authorities, SBV Governor Nguyen Thi Hong reaffirmed the banking sector’s commitment to contributing to the goal of achieving 8 per cent economic growth in 2025. Notably, the SBV pledged to maintain a credit growth rate of around 16 per cent this year while ensuring economic stability, controlling inflation, and maintaining monetary market stability.

“SBV has announced credit targets and will adjust credit levels according to inflation trends,” Hong said. “The sector will continue to implement large credit packages, including a $4 billion support package for the fisheries sector and a $4.8 billion package for housing projects.”

Regarding interest rates and exchange rates, she emphasised that the banking sector will continue efforts to reduce interest rates to support businesses and individuals while closely monitoring international market influences to make appropriate adjustments.

“Exchange rate adjustments must align with foreign currency supply and demand, tax policies, and global monetary regulations. The government urges balanced trade measures, while the SBV mandates cost-cutting to sustain lower interest rates and support the economy,” added Hong.

Nguyen Thanh Tung, CEO of Vietcombank, stated that the bank aims for a minimum credit growth of 16 per cent in 2025, focusing on key sectors such as infrastructure, energy, transportation, and export-oriented manufacturing.

“While many foreign enterprises benefit from supportive mechanisms, Vietnamese companies still face difficulties in accessing capital. Therefore, we recommend more flexible financial policies to encourage large domestic firms to participate more deeply in supply chains and local manufacturing, enhancing the economy’s added value,” Tung said.

Banks have taken swift action to reduce their deposit rates following a meeting with the central bank (SBV) on implementing measures to stabilise deposit rates on February 25.

On February 25, the SBV held a meeting with credit institutions to address strategies for stabilising deposit interest rates. As a result, banks such as Eximbank, BVBank, KienlongBank, the Maritime Bank of Vietnam (MSB) and VietBank have announced new deposit interest rate schedules, with the highest reduction reaching up to 0.7 per cent per year.