Duc Nam and Van Nam
A customer transacts at a bank in HCMC. Total capital mobilized by banks in the city amounted to over VND1,579 trillion in the first two months, up nearly 18% year-on-year - PHOTO: THANH HOA
Banks said they have attracted more corporate and individual depositors after the nine-day Lunar New Year holiday (Tet). This is why their liquidity has been rated as good after the nation’s longest holiday, which ended on February 14.
As a result, open market operations (OMO) were seen quiet last week as a few banks borrowed via this channel. The State Bank of Vietnam (SBV) did not inject money into the system via OMO but some VND48.28 trillion (US$2.15 billion) fell due, leaving a net withdrawn amount of VND48.02 trillion, the highest in months.
The central bank did not issue treasury bills in the past 11 weeks.
Interest rates for Vietnam dong loans of different tenors continued dropping sharply on the interbank market after Tet.
Last week saw the rate of overnight credit dipping to 1.79% per annum, one-week tenor to 2.27% per annum and two-week tenor to 2.69% per year, falling by 1% each against the week earlier.
To tap into good liquidity in the banking system, the State Treasury issued large volumes of three-year, five-year and 15-year Government bonds. Notably, all G-bonds offered for sale were snapped up.
Money dealers said such good liquidity at banks is a supporting factor for the issuance of G-bonds to raise capital for the State budget in the next few weeks. Lenders registered to acquire large volumes of bonds last week so bond yields are expected to inch down 0.1 percentage point for all tenors next week.
On the secondary bond market, bond yields of all tenors contracted slightly last week. According to Bao Viet Securities Company, the respective coupons of one-year, two-year, three-year and five-year bonds declined to 4.864% per year, 5.143% per year, 5.583% per year and 6.365% per year. Seven-year, 10-year and 15-year bonds carried coupons of 6.858% per annum, 7.108% per annum and 7.7% per annum respectively.
Jan-Feb capital mobilization in city up 18% y-o-y
* Total capital mobilized by banks in HCMC exceeded VND1,579 trillion (US$70.5 billion) in the first two months of this year, up nearly 18% year-on-year, according to the HCMC government.
A report on the city’s socio-economic performance in January-February released by the city government on February 29 showed that deposits in the Vietnam dong at banks increased and accounted for 85% of the total.
Total outstanding loans in HCMC had amounted to VND1,247 trillion by end-February, up 15.44% from a year earlier. Of the amount, medium- and long-term outstanding loans made up 57.5% and short-term credit the remainder.
The city government said short-term outstanding loans for the five priority sectors of agriculture and rural development, export goods production, small- and medium-sized enterprises (SMEs), supporting industries and high-tech enterprises had totaled VND144 trillion in the year to February, with SMEs accounting for 60%.
In the next three months, the city government will draw up programs to support local businesses to boost production and deal with difficulties, and improve the investment environment to attract more domestic and foreign investors.
The city government will find solutions to do away with red tape to back enterprises, organizations and investors in the city.
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