Businesses also take advantage of depositing money in banks to earn interest.

Enterprises deposit over 6 million billion VND

For example, PV Gas Corporation was depositing nearly VND 39,800 billion in banks at the end of September. This amount accounted for 47% of the company's total assets and brought PV Gas a profit of VND 1,570 billion, nearly 1.8 times higher than the same period. While bank interest rates increased, the company's business situation was difficult. PV Gas' revenue decreased by more than 14% compared to the end of 2022, reaching VND 67,383 billion; profit after tax decreased by 23%, reaching VND 9,017 billion.

Doanh nghiệp cũng tranh thủ gửi tiền ngân hàng kiếm lãi - Ảnh 1. — Businesses with huge amounts of money deposited in banks

Similarly, although the deposit balance decreased by more than VND4,700 billion compared to the beginning of the year, the amount that Hoa Phat Group (HPG) deposited in the bank was more than VND29,650 billion at the end of September. The interest that this company received was more than VND1,550 billion. Accumulated in 9 months, HPG achieved after-tax profit of VND3,381 billion, down 63% compared to the same period.

Having a large amount of bank deposits has helped Mobile World Investment Corporation (MWG) escape losses. At the end of September 2023, MWG had a deposit of VND 20,250 billion, double that of the end of 2022, and other investments of VND 650 billion. Since the beginning of the year, MWG has earned VND 1,357 billion in interest. After deducting expenses, Mobile World reported a profit after tax of VND 38.8 billion in the third quarter, a sharp decrease compared to VND 906 billion in the second quarter of 2022. Or Novaland Group, after the first two quarters of the year, has made a profit again. In the third quarter of 2023, Novaland achieved consolidated revenue of more than VND 1,070 billion and profit after tax of VND 137 billion. As of September 30, Novaland's cash and cash equivalents were VND3,435 billion, down 60% compared to the end of last year. For cash equivalents, Novaland recorded VND2,162 billion at the end of the quarter, down 61.4% compared to the end of 2022. Cash equivalents are bank deposits with original terms of 1 - 3 months and interest rates of 2.5 - 6%/year.

In addition, some companies with bank deposits such as Quoc Cuong Gia Lai Joint Stock Company also have cash and cash equivalents of up to 47 billion VND, 15 times higher than at the beginning of the year and most of them are deposits; Phat Dat Real Estate Development Joint Stock Company recorded nearly 53 billion VND in cash in the third quarter of 2023, down 80% compared to the end of last year... Most businesses deposit savings in banks for terms of 1 - 3 months.

According to the State Bank of Vietnam (SBV), after many months of negative decline compared to the end of 2022, now the deposits of economic organizations have increased by 1% and officially exceeded 6 million billion VND. The growth rate of deposits of economic organizations in August increased faster than that of individuals, adding 104,000 billion VND compared to July, to 6,013 million billion VND. Meanwhile, the residential sector continued to increase deposits in August by 44,000 billion VND. Compared to the end of 2022, the amount of residential deposits increased by 9.68%, over 6,433 million billion VND.

Cash flow temporarily shelters in banks

Deposits into the banking system are still increasing even though savings interest rates have dropped to their lowest level in the past 3 years. Currently, the interest rate for businesses with terms of 1-3 months is around 2.7-3%/year, from 6-12 months is at 4-4.6%/year, and over 12 months is at 4.6%/year. The interest rate has decreased rapidly as credit growth in the first 9 months has only completed more than 1/3 of the plan, increasing by only 6.92% at the end of September.

Commenting on the situation of enterprises choosing banks to deposit money to receive interest in recent months, Associate Professor, Dr. Dinh Trong Thinh (Academy of Finance) assessed that this reflects that enterprises are still facing difficulties, so they temporarily deposit money in banks with a term of 1-3 months. "While there are no orders, projects or any investment channels that bring profits at this time, it is not difficult to understand why business owners choose to deposit money in banks," Mr. Thinh commented and analyzed that in the context of difficult production and business, while still having to maintain company operations, incurring costs such as paying salaries to employees, renting factories, etc. Choosing to temporarily take refuge in banks to receive interest also creates additional revenue for enterprises. Looking at the term that enterprises choose to deposit (from 1-3 months) shows that if there are investment opportunities, orders for production and business activities, this cash flow is ready to flow into the market.

Sharing the same view, Dr. Nguyen Huu Huan, Head of the Finance Department of Ho Chi Minh City University of Economics, predicted that it is possible that businesses do not have many orders, so they are forced to deposit money in banks to wait for new opportunities. However, it is also possible that businesses are showing signs of recovery, and the amount of money paid from partners to accounts for previous production orders should be better than before. Cash that businesses receive quickly, while there is no time to plan how to use it most effectively, should be temporarily deposited in banks.

In addition, the savings interest rate of the residential sector is currently decreasing quite low. Banks are mobilizing from 2.7 - 6.5%/year for all terms, short terms under 6 months are only half of last year's level. This is also the time when long-term deposits of 1 year or more with high interest rates of individuals are due to mature. With low interest rates as present, this cash flow is likely to find investment channels for higher returns. In the case of residential deposits flowing into the accounts of individual investors opened at securities companies, this amount of money is considered as the amount of money deposited for enterprises. Recently, many investors have returned to the stock market, which can also help increase the flow of corporate deposits.

Regardless of the reason, the fact that savings interest rates have decreased while deposits from residents and businesses have increased sharply still shows that there are not many business opportunities at the present time.

As of September 30, the total mobilized capital of banks reached about 12.9 million billion VND, an increase of about 5.9% compared to the end of 2022. Total means of payment increased by 4.04% compared to the end of 2022, to more than 14.8 million billion VND.

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