State Audit: "Loan interest rates do not decrease but increase"

The State Audit has just sent a report to the National Assembly Standing Committee and National Assembly deputies summarizing the results of the audit of the implementation of the Socio-Economic Recovery and Development Program. The noteworthy content is that the State Audit has assessed the implementation of the supportive monetary policy in 2022.

Regarding lending interest rates, in the report, the State Audit stated that Resolution 43 of the National Assembly on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program sets a target of striving to reduce lending interest rates by about 0.5-1%/year.

In 2022, the State Bank has implemented measures to reduce lending interest rates of credit institutions.

However, the measures are ineffective, not achieving the target of reducing lending interest rates by 0.5-1%/year according to Resolution 43, but rather tending to increase. The margin between average lending interest rates and mobilization interest rates is still large, over 4%.

In addition, there are some noteworthy contents that in a short period of time, the State Bank has increased the operating interest rates twice (September 23, 2022 and October 25, 2022) with a total increase of 2%.

This led to a sudden increase in deposit interest rates and lending interest rates across the system in the last months of the year.

Deposit interest rate is over 11%, and lending interest rate is over 13%.

Accordingly, the average deposit interest rate and lending interest rate of the whole system both increased, respectively to 6.35%/year and 10.56%/year in December 2022. Many credit institutions have high average lending interest rates and increased sharply in the fourth quarter, including Oceanbank 9.7 - 11.12%/year; GPbank 10.99 - 12.89%/year; Kienlongbank 10.57 - 13.86%/year; SCB 11.49 - 11.54%/year; VIB 9.84 - 12.45%/year; NamAbank 10.43 - 12.21%/year...

"The sudden increase in operating interest rates after a long period of no change by the State Bank, while central banks around the world have gradually increased interest rates since the beginning of 2022, is difficult to predict, surprising the economy, making the economic environment riskier, and making it impossible for people and businesses to make stable long-term business plans," the State Audit emphasized.

In addition, the audit report also pointed out that many banks, instead of cutting costs and lowering interest rates to support businesses, increased interest rates in 2022 compared to the beginning of the year.

Banks' pre-tax profits increased, of which revenue from credit activities accounted for the majority and continued to increase, operating expenses also increased. The ratio of operating expenses to outstanding loans in 2022 increased compared to 2021.