October 19 Loan-Rate Cuts Don't Yet Reach Existing Loans

On October 19, several commercial banks announced loan-rate cuts one after another. Side by side, the cuts look almost identical, at around 1.5–2% a year.^CafeF The real differences sit in the lines few people read closely: who the package covers, whether it applies to new disbursements or loans already running, how much money is behind it, and how long it lasts.

For anyone borrowing or about to borrow for business, those lines decide whether next month's interest bill changes. On what has been announced so far, new borrowers benefit first, while existing loans have to wait.

What the Governor asked for at the October 19 meeting

On the morning of October 19, State Bank of Vietnam (SBV) Governor Phạm Đức Ấn chaired a meeting with the chairmen and chief executives of commercial banks. According to CafeF, the SBV required senior bank leaders to attend in person, not send substitutes.^CafeF

FireAnt relayed what was said: the Governor asked banks to focus on cutting lending rates by 1.5–2% a year for production, business and priority sectors, selectively rather than across the board.^FireAnt The line that matters most to existing borrowers is that rate cuts should be considered for both outstanding balances and new loans.

That line needs to be read at its true weight. It is a directive given at a meeting, relayed by the press. The document the SBV has actually issued is an October 18 official letter, which mainly asks banks to cut deposit rates and backs this with credit-quota penalties. Based on available sources, no document yet requires banks to cut rates on old loans. Whether any one borrower's loan gets cheaper still depends on the terms of the lending bank itself. The SBV said it will closely monitor deposit and lending rates and how banks publish loan rates on their websites, and will deal strictly with violations.^FireAnt

The packages side by side

The table below pulls together reports from October 18–19. "Not stated" means the available sources say nothing on the point; it does not mean the bank excludes it.

ACB. Mr. Từ Tiến Phát, CEO of ACB, said on the sidelines of the meeting that the bank is rolling out a special lending program for businesses with cuts of 1.5% to 2%. ACB's earlier program, with a 1% cut, has disbursed about VND 5,000 billion.^CafeF The quota, deadline and scope of loans for the new program have not been stated. This is a statement by a bank executive; detailed terms must wait for an official notice.

Agribank. From October 19, Agribank cuts lending rates by up to 2% a year against its normal rates, focused on priority sectors and borrowers needing production and business capital.^CafeF The roughly VND 2,000 billion figure is the resources the bank expects to commit to rate cuts, meaning interest income it agrees to forgo.^CafeF It is not the lending volume of the package, so it cannot be compared directly with Vietbank's VND 3,000 billion. Agribank also continues a separate VND 70,000 billion preferential package, with rates 1–2% a year below the average for the same tenor.

LPBank. This is the package with the clearest scope. Rates fall 1.6–2% a year on new disbursements for short-term production and business, from October 19 through December 31, 2026.^CafeF It targets individuals, household businesses and micro-enterprises needing working capital or raw materials, with priority for agriculture and rural areas.^FireAnt On the wording available, someone already paying interest on an old LPBank loan is not covered.

Vietbank. A VND 3,000 billion package, with rates at least 1.5% a year below normal, valid until June 30, 2027 or until the quota is used up. It targets production and business firms, priority sectors, and areas such as science and technology, digital transformation and green transition.^{Người Quan Sát} It has the longest deadline in the group, but the "until the quota runs out" condition means the package may close earlier than the date on paper.

Sacombank. The bank is setting aside up to VND 40,000 billion for corporate clients, with a 2% cut and preferential rates from 8.5% a year. Eligible borrowers are domestic firms in key sectors, exporters/importers and FDI companies.^CafeF It is also the only bank in the group to state an absolute rate.

Two state-owned banks serve as benchmarks: BIDV applied a short-term lending program from October 15, while Vietcombank has only pledged a cut of at least 2% through year-end.^CafeF

The same "2% cut" saves different amounts

Every figure in the table is a gap against that bank's own normal rate. Except for Sacombank, no package states the rate after the cut. Two borrowers each getting "2% off" at different banks can still pay different rates, because the starting points differ.

Savings also depend on tenor and disbursement date. As an illustration: on a VND 1 billion loan for six months, a 2% annual cut trims interest by about VND 10 million. Disburse the same loan in mid-December under a package that ends on December 31, and what you receive depends on whether the bank applies the discount for the full tenor or only while the program is in force. That is worth asking directly before signing.

The purpose of the loan matters too. All the packages prioritize production, business and priority sectors, in line with the Governor's "no across-the-board cuts" request. A consumer loan or a mortgage is not automatically cheaper just because the bank announced a package.

Who is missing from the announced packages

On what has been published, some groups of borrowers do not yet see themselves.

The first is people paying interest on older business loans. LPBank states that its package covers new disbursements only, and the other banks have not said. The Governor's call to consider existing balances gives borrowers grounds to ask their bank, but it is not yet an entitlement.

Next are home-loan borrowers, since no package in the October 19 round targets that need. Last are medium- and long-term borrowers: the package with the clearest tenor, LPBank's, applies only to short-term loans, and the others have not stated tenor.

Answers for these groups will come from each bank's detailed notice, posted on its website, where the SBV has said it will watch how loan rates are published.

Savers: new deposit rates are lower

The other side of the equation is deposit rates. According to Mr. Phát, ACB cut its deposit rate schedule on October 19, effective October 20.^CafeF LPBank lowered deposit rates by 0.5–0.6% a year for tenors of six months and above.^CafeF Vietbank cut 0.5% a year for tenors from six months, effective October 19.^{Người Quan Sát} Anyone opening a new deposit or rolling one over at these banks will earn less than before.

Reading the table for your own situation

On what has been announced, the order of who gets relief is fairly clear. First in line are new borrowers in genuine production and business, inside the quota and ahead of the package deadline. Household businesses and micro-enterprises needing short-term working capital have the clearest terms at LPBank, with a December 31 deadline. Larger borrowers have Vietbank, with a longer deadline, and Sacombank, with the biggest quota, though the detailed conditions of both still need to be read in the contract.

Holders of existing loans are in a waiting position. The Governor's request opens a possibility, but rates change only if the lending bank writes the existing loan into its terms. If by the end of October banks are still announcing packages only for new disbursements, this round of cuts mainly reaches new money, while the interest burden on loans already being repaid stays almost unchanged.

The signal to watch in the coming days is detailed notices from ACB, Agribank and Sacombank on existing loans. When talking to a bank, borrowers should ask whether their loan qualifies, what the post-cut rate is in percent a year, and how interest is recalculated when the program expires.