Jul 30, 2012

Vietnam - Commercial banks try every possible means to push up lending

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VietNamNet Bridge – Offering to pay commissions to those who can bring borrowers to banks, inducing other banks’ clients, offering preferences to loyal clients are all the methods commercial banks are applying to push up lending.

ACB, which caught the special attention from the public in recent days when it launched the program on lending up to 500 million dong without collaterals, or the program on pushing up the lending to individuals and households, has just announced another program.

ACB has promised attractive awards to the clients who persuade their relatives and friends to use the bank’s set of products reserved for individual clients in the period from July 23 to December 30, 2012.

Under the program, rewards would be given when someone can introduce a client who uses one of the two available credit packages with the disbursed money of 300-500 million dong and the lending terms of at least three months. He would be given a domestic debit card with the face value equal to the value of the award, which is calculated based on the disbursed money.

The awards, according to ACB’s credit officers, would be extracted from the 10 percent of the interests the borrowers pay within three months.

Nguyen Thanh Toai, Deputy General Director of ACB, said ACB accepts lower turnover and profit in return for higher lending percentages.

Sacombank has also tried to stimulate the demand by launching the program “more friends, more gifts.” A client, who is a Sacombank international credit card holder, would receive bonus points which can be converted into gifts if he can bring a new client to the bank’s card service.

Both the commercial banks have noticed that the new introduced clients must not have any transactions with the banks in the past, or stopped transactions with the banks six months ago.

Offering commissions is not the measure taken by ANZ, but it is applying another method. Le Giao, a Techcombank’s golden credit card holder, said that he has become an ANZ’s card holder.

“Other banks always require complicated procedures, asking card holders to show a lot of documents. Therefore, I have decided to use the card services of ANZ,” he said.

Giao said that ANZ’s officers, after realizing that he is the golden card holder of another bank, did not ask him to show many documents.

“I just needed to show three kinds of documents, including identity card, the front page of the credit card I was holding, and the residential certificate, to get a golden credit card with the same credit limit,” he said.

Low credit growth makes banks suffer constant anxiety

Commercial banks now have profuse capital but do not have borrowers. Businesses do not intend to borrow money these days, because they are not sure if they can sell products in the context of the weak demand.

According to the State Bank of Vietnam, the overnight interest rate in the interbank market has been decreasing. By the end of July 23, the overnight interest rate had dropped to 5.26 percent from 7.5 percent. After that, it dropped once again to 2.5 percent on July 25.

The interest rate reductions have also been reported for other terms of loans on the interbank market. One month loans are now lent at 6 percent, down by one percent. Especially, the interbank market has been very quiet with only 25 trillion dong worth of capital traded a day.

Le Tham Duong from the HCM City Banking University said while the number of good clients keeps decreasing, the number of capital for lending has been increasing. Therefore, the competition to scramble for borrowers would even be stiffer.

Source: Dat Viet


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