SeABank has announced the new interest rate table which sees sharp decreases for all its products (the decreases are different depending on lending subjects). Prior to that, at the end of September 2007, Southern Bank announced cutting the lending interest rates by 0.05%-0.2% per month.

Commercial banks try to lower lending interest rates in order to speed up the disbursement rate in the last months of the year. Analysts said that banks have a big volume of usable capital which they have mobilzed since the beginning of the year, while they find it hard to find clients now. A lot of new banking products like funding house and car purchasing deals, funding private business have been introduced by banks with attractive offers in lending conditions and interest rates.

Eximbank, for example, has cooperated with the real estate developers of Phu My Hung, Van Phat Hung, and project investors of Phu Nhuan, An Phu and Anh Khanh to provide loans. Clients can borrow money to purchase houses for 20 years at maximum.

ABBank has launched onto the market the chain of retail products (funding car and house purchasing with no mortgaged assets). The interest rates are very attractive, 0.99-1.05% per month, which represent the decrease of 20% compared to the previous rates.

Meanwhile, VIB Bank targets enterprise clients when offering the chain of more than 10 products.

The move by the banks to cut lending interest rates has not been anticipated. Just one or two months before, banks still tried to increase the deposit interest rates to mobilize more capital. Meanwhile, the central bank required higher compulsory reserve ratio for deposits. Analysts then thought that banks would have to increase the lending interest rates to offset the high capital mobilization cost.

However, the excess of usable capital at banks has forced them to lower lending interest rates. The capital inflow into banks was high in previous months, as the quiet stock market and real estate market prompted investors to keep money at banks. Meanwhile, the lending subjects of banks have been narrowed as the result of the central bank’s instruction to limit loaning to securities investors.

Under the instruction, by the end of this year, commercial banks must reduce the outstanding loans given to securities investors to below 3% of total outstanding loans. And commercial banks are trying to raise the loans to non-securities clients in order to fulfill the state bank’s instruction.

Source: VN Net.