Banks fear missing deadline to cut interest rates (29/10)
06/08/2010 - 72 Lượt xem
Many local banks do not think they'll be able to do it in time.
Ho Huu Hanh, deputy standing director of the central bank's Ho Chi Minh City branch, said the rate of lending against securities at commercial banks in the city remained high despite reduction attempts.
“I'm afraid that many lenders will fail to keep the rate to below three percent on December 31” Hanh worried.
Some banks have stopped lending to stock investors since the State Bank of Vietnam (SBV) issued the decree on May 28.
But Ly Xuan Hai, CEO of the Asia Commercial Bank (ACB), said the bank would miss the deadline despite its halting of loans against securities.
In the past, stock traders have been able to extend debt deadlines.
But now they must pay off when their loan contract is expired, forcing some to offload their shares.
“We made many loan agreements that had been made before the decree was issued,” Hai explained.
“We can't ask clients to pay sooner than their deadlines.”
He added that ACB has asked for guidance from the state bank.
Nguyen Ngoc Truong Trinh, deputy CEO of Dong Duong Securities Company, opined that the stock market would be affected by the decree towards the end of the year, as many big companies expect to issue their initial public offerings (IPOs) by the year's end.
The IPOs would spark a huge demand for money from stock investors but domestic lenders would not be able to do anything, he said
However, reducing loan-securities rates is not impossible.
According to a chief of a HCMC commercial bank, his bank's rate of lending against securities was more than 7 percent of the lender's overall credit portfolio when the decree was announced.
To meet the SBA's deadline, he said the bank had to raise its total outstanding loans, as well as forbid stock investors from extending their debt deadlines.
The moves put the bank's loans against securities ratio below 3 percent after two months.
Source: ThanhnienNews.
