Interest on bank deposits starts to rise

Monday, Jun 29, 2015 07:00

OceanBank, which has become State-owned, offers 7 per cent for deposits of less than 12 months. — Photo
Compiled by Le Hung Vong

After a long time banks have increased deposit interest rates, which have gone up by 0.1-0.5 per cent.

Phuong Nam Bank pays interest of 6.5 per cent for short-term deposits and 7.1 per cent for deposits of over one year.

OceanBank, which has become State-owned, offers 7 per cent for deposits of less than 12 months.

Giant public lender Agribank has hiked the interest rate by half a percentage point (from 6.3 per cent to 6.8 per cent) for 24-month deposits while another State-owned bank, BIDV, has increased rates by 0.2-0.3 per cent.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's HCM City office, said short-term deposits account for over 70 per cent of deposits while outstanding loans make up 55 per cent of total deposits.

To ensure liquidity, banks have had to increase rates on long-term deposits to narrow the gap between them and loans, especially since, in the past few months, demand for medium- and long-term credit has shot up in HCM City.

Sai Gon Giai Phong (Liberated Sai Gon) newspaper quoted Minh as saying demand for credit is an encouraging sign since it means companies are again seeking to expand after years of stagnancy.

HDBank deputy general director Le Thanh Trung said the increase in interest rates is warranted to keep the currency stable.

Low deposit interest rates and a depreciation in the dong would cause people to buy dollars, he said.

Pham Linh, deputy general director of VietA Bank, said banks have to raise deposit interest rates because they have been kept (at 4-4.5 per cent annually) too low.

The rates must be increased to make deposits a competitive asset class since others like stocks and property have lured away huge amounts of money because bank interest rates are too low.

Textile exports may hit $28.5b

Viet Nam is expected to earn US$28-28.5 billion from export of textiles and garments this year, Le Tien Truong, general director of the Viet Nam National Textile and Garment Group (Vinatex) and deputy chairman of the Viet Nam Textile and Garment Association (VITAS), said.

According to figures released by Vinatex at a review meeting in Ha Noi last week, apparel shipments in the first half have increased by 10.26 per cent year-on-year to $12.8 billion.

Truong said last year apparel exports had been worth over $24 billion, a year-on-year increase of 19 per cent. This included $21 billion worth of garments with textiles accounting for the rest.

The major markets for Vietnamese textile and garment products include the US, Europe, Japan, and South Korea.

According to VITAS, the US has imported apparel worth $5.18 billion from Viet Nam this year, up by more than 11 per cent from last year and accounting for 42 per cent of Viet Nam's total exports.

Exports to the EU have risen by 8.2 per cent year-on-year to $1.45 billion.

Viet Nam was the second largest apparel exporter to Japan and Korea behind China in the January-June period, according to Vinatex.

Truong said apparel exports to the Eurasia Economic Union (EEU) are forecast to soar by 50 per cent in the first year after the trade pact takes effect and to rise by 20 per cent annually in the following years.

Viet Nam is currently the eighth largest apparel exporter to the EEU with sales of over $300 million, he said.

Viet Nam signed the FTA with the EEU in Kazakhstan in May to speed up co-operation in various sectors like trade, services, investment, finance, banking, and e-commerce.

Central province seeks casino

Thua Thien - Hue Province authorities have asked the Government to add its Chan May-Lang Co Economic Zone to the list of areas in a master plan for casino development in the country, news website VnExpress reported.

In a recent communication to the Government, the province said as a major coastal economic zone that has the potential to become an international centre for trade, residential areas and resorts, Chan May-Lang Co could develop into a tourism centre with casino facilities.

Many foreign investors are keen to invest in a major recreational complex that includes a casino in Thua Thien-Hue.

The provincial authorities said two foreign firms are seeking such an opportunity. They are a Hong Kong firm that plans a $2 billion investment in Lang Co and a Singaporean company with a nearly $900 million project.

According to the Chan May-Lang Co Economic Zone Authority, the zone's infrastructure is well developed and can meet the demands of big investors. Thus far it has attracted tenants who have registered to invest over VND34 trillion (about $1.55 billion) in 25 tourism projects and more than a third of the amount (around VND12 trillion) has already come in.

They include a $875 million project by the Banyan Tree Group of Singapore, a $102 million project by Bai Chuoi Co of Singapore's Cattigara Group, a nearly $300 million project by the Viet Nam-headquartered Lap An Development and Investment Co, and an investment of VND5.23 trillion (nearly $240 million) by Phong Phu - Lang Co Co.

Other foreign companies planning big-ticket tourism projects in the zone include Korean group ADA with a $500 million resort and American firm Capfin Asia with a $585 million project.

Thua Thien-Hue authorities said in 2014 the province received three million visitors, including one million foreigners. The province is expected to attract 12 million visitors in 2020, including five million foreigners.

Surveys found foreign visitors to Hue and neighbouring localities interested not only in historical sites and natural wonders but also recreational destinations integrated with casinos.

"Casinos not only attract foreign tourists but also make them stay longer, spend more and come back," a report by the provincial authorities says.

"To add Lang Co – Chan May to the list of areas [in the national master plan] having casinos is one of the most important conditions to attract big investment by investors who have the financial capacity and experience in the tourism business."

Thua Thien-Hue is the second province in the central region to seek approval from the Government for setting up casinos this year.

A month earlier Khanh Hoa Province sent a similar communication to the Government, seeking approval to build an international recreation centre with a casino at a tourism park located in the north of the Cam Ranh Peninsula in Cam Lam District.

However, Khanh Hoa could not get approval from the Ministry of Finance.

The Ministry said the casino zoning plan should not be amended until a decree on Casino operation (compiled by the Finance Ministry) is issued.

According to the Finance Ministry, seven companies have been licensed for casino operation across the country, including the Ho Tram Strip in Ba Ria-Vung Tau and the Nam Hoi An project in the Central province of Quang Nam.

Other places in Viet Nam to have casinos are Da Nang, Quang Ninh, Kien Giang, and Hai Phong. — VNS

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