UPDATE 1-Vietnam bank BIDV to cut loan rates to boost economy

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HANOI, July 8 (Reuters) - State-run BIDV, Vietnam's second-largest lender, said it was cutting its lending rates for customers in key industries, such as oil, cement and steel, to boost the economy.

The unlisted bank said it would cut its dong loans by 20 basis points for all borrowers and also reduce the rates on short-term loans to select clients by 60 basis points, to provide for "a reasonable growth of the economy", BIDV chairman, Tran Bac Ha, said on Tuesday.

Manufacturers of essential goods such as medicines, foods, water and transport companies, would also enjoy cheaper loans, Ha said.

Vietnam's central bank had aimed to cap Vietnam's credit growth this year at 30 percent after a surge of 54 percent in 2007 to control double-digit inflation since last November.

But last week Vietnam's central bank said it could cut its base rate from August, when inflation is expected to be under control, although analysts were sceptical that the consumer price index (CPI) growth was sufficiently low to support a rate cut. [ID:nHAN108063]

CPI rose 2.14 percent in June from May, smaller than the 3.9 percent increase in May from April.

BIDV also said its gross profit during the first half of this year jumped 44 percent to 604 billion dong ($36.6 million).

Total assets of the Hanoi-based Bank for Investment and Development of Vietnam reached 224.26 trillion dong at the end of last month, 10.3 percent up from the same period last year.