Vietnam credits nearly double deposits, pushing up interest rates
Vietnam’s credit expansion has been nearly double deposit expansion, creating pressure on its banking system's liquidity as the year is coming to an end.

Vietnam's credit growth reached 10.08% year-on-year in the first 10 months of 2024. Photo by The Investor/Trong Hieu.
In that context, 13 banks have raised interest rates in November, namely Agribank, ABBank, Techcombank, MBBank, VIB, VietBank, VietABank, IVB, BaoVietBank, Nam A Bank, GPBank, LPBank, and HDBank. Of these, Agribank and VIB have increased rates twice.
The development signals an intense race to attract deposits as the year-end approaches. The 6% per year interest rate has returned to the market, offered by ABBank, IVB, BacABank, Saigonbank, SHB, OceanBank, and DongA Bank.
Some lenders have raised interest rates for 6-month deposits to 5.3% per year.
Notably, both private and state-owned commercial banks are joining the competition.
After two rate hikes in November for both in-branch and online deposits, Agribank is outpacing others in the Big 4 group.
Specifically, for 3-5 month deposits, the wholly state-owned creditor is offering 2.9% per year, while VietinBank and BIDV 2.3%, and Vietcombank 1.9%.
For 12-18 month deposits, Agribank is offering 4.8%, while the figure for both VietinBank and BIDV is 4.7%, and it is 4.6% for Vietcombank.
Experts agree that the increase in interest rates at the end of the year is inevitable as businesses ramp up production, driving higher demand for capital. To attract depositors, banks are compelled to offer competitive interest rates.
According to MBBank Securities (MBS), the trend of rising interest rates will continue until the year-end as credit growth is now double deposit expansion.
According to the General Statistics Office, as of September 27, capital mobilization by credit institutions increased by 4.79% from the year beginning and 6.63% year-on-year, while credit growth reached 8.53% as compared to about 6.24% in the same period last year.
Data from the State Bank of Vietnam shows that credit growth as of October 31 had reached 10.08%, far exceeding the 7.4% one year earlier.
MBS forecasts that the 12-month deposit interest rates at major banks will rise by about 20 basis points to 5.1-5.2% by the end of 2024.
The hike not only ensures the banking system's liquidity but also meets businesses’ capital needs and facilitates credit growth in the final quarter of the year.
Some analysts believe that in addition to the liquidity pressure to meet seasonal credit demand, the recent fluctuation in exchange rates is a key factor driving the uniform increase in deposit interest rates.
However, lending rates are expected to remain stable to support businesses and economic recovery in the final months of the year.
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