Original report from Phnom Penh
03 February 2010
A high number of deposits followed by a low number of loans have created a cash flood for banks, forcing them to lower their interest rates.
Since mid-2009, major banks have sought to increase the number of loans they give and decrease the amount of cash deposits they receive, or at least the interest they must pay out.
The increased liquidity produced by high numbers of depositors and low numbers of borrowers means the banks have not been able to earn revenue on loans and face higher risks from increased costs.
Acleda Bank, for example, saw a 40 percent increase in deposits in 2009 compared to the year before, for a total of $688 million. But as of January, the bank has lowered its interest rates on deposits to 5.75 percent, down from 7.5 percent in mid-2009. At the same, the bank has lowered its lending rate for medium-sized loans (between $20,000 and $1.5 million) from 15 percent to somewhere between 10 percent and 13 percent. Rates for small loans dropped from 28 percent to 26 percent.
No comments:
Post a Comment