HANOI : Vietnam's banks face higher borrowing costs after deposits in the country's banking system registered a first monthly decline in more than two years, while inflation is rising.
Can Van Luc, a government adviser and an economist at the Bank for Investment and Development of Vietnam, said banks were seeking to shore up their deposits in anticipation of rising demand for loans during the rest of the year. Corporate deposits at banks as of end-January fell by about 2.4 per cent from the end of last year to 6,670 trillion dong , while deposits by individuals fell 0.5 per cent to 6,500 trillion dong, the latest central bank data shows.The SBV is targeting credit growth of 15 per cent for this year, but lending by banks by the end of March rose by only 1.34 per cent from December. Credit growth in Vietnam often accelerates in the second half of the year when demand picks up.
Vietnam Technology and Commercial Joint Stock Bank on Wednesday raised its rates on all deposit terms by 0.1-0.4 per centage points, a bank employee said. This raised its rates on short-term deposits to 4.55 per cent-4.95 per cent.