The total assets of commercial banks under state ownership accounted for 43.4% of the total of the banking sector, followed by joint stock commercial banks with 41.4%.

 VietNamNet Bridge – The lending interest rates offered by many commercial banks have reduced to below the deposit interest rates. However, businesses don’t intend to borrow money at this moment.

 Significant challenges remain for the banking industry to reach the annual credit growth target this year, despite certain improvement in lending situation, State Bank of Viet Nam (SBV) officials said.

The banks’ move of pouring big money into corporate bonds, in the eyes of analysts, is a form of providing loans to businesses. Analysts have warned that it will be very difficult to settle the bad debts from the bond investments.

 VietNamNet Bridge – If the inflation rate is curbed at 6.5 percent this year, the dong ceiling deposit interest rate would not go down to below 7 percent per annum as expected by businesses.

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VietNamNet Bridge – The banking sector has become boisterous with a lot of big shareholders selling their shares in big quantities to quit the business field. Meanwhile, a lot of hidden “big guys” have jumped on the bandwagon.

It is highly possible that the State Bank would slash the deposit interest rate further--by one percent, to make it easier for businesses to access bank loans. However, economists have warned that this would do more harm than good.