Hanoi (VNA) – Since commercial banks has seenbig earnings during the third quarter of 2021 despite social distancing measuresin place in many cities and provinces, insiders believed there is stillroom for lenders to further cut interest rates for enterprises affected byCOVID-19.

Fiin Group reported that total profits of nine banks in Q3declined 13.4 percent compared to the previous quarter, largely because theyhave increased provisions in the face of rising bad debts and slashed interestrates to support pandemic-hit firms. The figure, however, is still 10.8 percenthigher than the same period last year.

The profit growth was even much higher in the first ninemonths of 2021 on the back of the banks' good performance during the earlymonths of the year. For example, Vietinbank’s pre-tax profit edged up 3.3percent year-on-year in Q3, and surged an exaggerate 33.6 percent year-on-yearin the first three quarters of this year, according to SSI Research.

A majority of profits came from the credit segment. TheNational Citizen Commercial Joint Stock Bank (NCB) earned nearly 1.09 trillionVND in net interest income from January-September, up 30.9 percent from a yearearlier.

An insider said the banks’ input costs are currently verylow as a result of increasing Current Account Savings Account (CASA). “COVID-19has forced more people to turn to non-cash payment services,” the source said,“this has double benefited the banks who have enjoyed not only inexpensivesource of funds from deposits but also expanding revenue from extra services.”

It is reported that there is a significant gap amongbanks when it comes to interest rate reduction for people and businesses affected by the COVID-19 pandemic.

Data from the State Bank of Vietnam (SBV) showed that 16banks in Vietnam waived more than 8.8 trillion VND worth of interest ratesfor affected borrowers from July 15 – August 31, equivalent to 43.01 percent of the committed amount of 20.6 trillion VND. 

BIDV led the way withover 1.03 trillion VND, followed by Vietcombank (943 billion VND) andVietinbank (857 billion VND), while the reduction amount was only below 100billion VND in many private lenders.

From that perspective, the source said there is large room for banks, particularly private lenders, to further cut interestrates and services fees to aid struggling clients./.