According to the third quarter financial report of the Bank for Foreign Trade of Vietnam (Vietcombank, VCB), the ratio of non-term customer deposits to total mobilization from the population (CASA) at the end of September reached more than 29.5%, the highest level in the first three quarters of the year.
Non-term deposits at this bank began to decline at the beginning of this year, a common situation in the banking system. The shift at that time stemmed from two reasons: deposits shifted to the term group to enjoy higher interest rates, and corporate customers restructured their working capital and reduced debt.
The scale of non-term deposits of customers at Vietcombank at the end of the first quarter recorded more than 369,000 billion VND, down more than 30,000 billion compared to December 31, 2022. The CASA ratio was at 28.79%, compared to 32.34% at the end of 2022.
This item increased in the second quarter, but the CASA ratio still decreased because the growth rate of non-term deposits was lower than the growth rate of total customer deposits. It was not until the third quarter that Vietcombank's CASA rebounded.
The scale of customers' non-term deposits reached nearly VND400,000 billion at the end of the third quarter, almost equivalent to the scale at the end of 2022. The CASA ratio also increased to more than 29.5%.
CASA plays an important role in the context of capital costs that are putting pressure on banks' growth. In the last two quarters, many banks' profits have narrowed as rising interest expenses have caused net interest income - the 'main breadwinner' - to decline. For Vietcombank, interest expenses and equivalents in the third quarter increased by more than 56%, while interest income increased by only 17%. However, the bank's net interest income only decreased slightly, while profits still increased by double digits thanks to reduced operating expenses and provisions.
According to the latest figures from the State Bank, in August, people deposited more than 43,700 billion VND into the banking system. This is the highest monthly increase compared to the same period in many years.
People's deposits in banks are still increasing sharply in the context of continuously decreasing deposit interest rates. As of mid-August, about a dozen banks listed the highest interest rates for deposits under 1 billion VND, over 7% per year. More than 20 remaining banks listed the highest interest rates (usually for one-year terms) from 6% to under 7% per year. By the end of August, interest rates continued to decrease, with many major banks bringing them to levels lower than during the Covid-19 period.
Minh Son
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