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

Businesses deposited over 6 trillion VND.

For example, Vietnam Gas Corporation (PV Gas) had nearly 39,800 billion VND deposited in banks at the end of September. This amount accounted for 47% of the company's total assets and brought PV Gas an interest income of 1,570 billion VND, almost 1.8 times higher than the same period last year. While bank interest rates increased significantly, the company's business situation is facing difficulties. PV Gas's revenue decreased by more than 14% compared to the end of 2022, reaching 67,383 billion VND; after-tax profit decreased by 23%, reaching 9,017 billion VND.

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

Similarly, although the deposit balance decreased by more than VND 4,700 billion compared to the beginning of the year, the amount of money that Hoa Phat Group (HPG) deposited in banks reached over VND 29,650 billion at the end of September. The interest earned by the company was over VND 1,550 billion. For the first nine months of the year, HPG achieved a net profit after tax of VND 3,381 billion, a decrease of 63% compared to the same period last year.

Large bank deposits helped Mobile World Investment Corporation (MWG) avoid losses. As of the end of September 2023, MWG had deposits of VND 20,250 billion, double the amount at the end of 2022, and other investments of VND 650 billion. From the beginning of the year to date, MWG has earned VND 1,357 billion in interest. After deducting expenses, Mobile World reported a net profit of VND 38.8 billion in the third quarter, a sharp decrease compared to VND 906 billion in the second quarter of 2022. Similarly, Novaland Group, after losses in the first two quarters of the year, returned to profitability. In the third quarter of 2023, Novaland achieved consolidated revenue of over VND 1,070 billion and net profit of VND 137 billion. As of September 30th, Novaland's cash and cash equivalents totaled VND 3,435 billion, a 60% decrease compared to the end of last year. Cash equivalents recorded VND 2,162 billion at the end of the quarter, a 61.4% decrease compared to the end of 2022. Cash equivalents are bank deposits with original maturities of 1-3 months and interest rates ranging from 2.5% to 6% per year.

In addition, some companies with significant bank deposits, such as Quoc Cuong Gia Lai Joint Stock Company, have cash and cash equivalents reaching 47 billion VND, 15 times higher than at the beginning of the year, and most of it is in the form of deposits; Phat Dat Real Estate Development Joint Stock Company recorded cash in Q3/2023 of nearly 53 billion VND, a decrease of up to 80% compared to the end of last year… The majority of businesses deposit their savings in banks for terms of 1-3 months.

According to the State Bank of Vietnam (SBV), after several months of negative growth compared to the end of 2022, deposits from economic organizations increased by 1% and officially exceeded 6 trillion VND. The growth rate of deposits from economic organizations in August was faster than that of individuals, adding 104,000 billion VND compared to July, reaching 6,013 trillion VND. Meanwhile, deposits from the household sector continued to grow in August by an additional 44,000 billion VND. Compared to the end of 2022, household deposits increased by 9.68%, exceeding 6,433 trillion VND.

Money is temporarily sheltering in banks.

Deposits into the banking system continue to increase despite savings interest rates falling to their lowest level in three years. Currently, deposit interest rates for businesses with terms of 1-3 months are around 2.7-3% per year, from 6-12 months at 4-4.6% per year, and over 12 months at 4.6% per year. Deposit interest rates are falling rapidly as credit growth in the first nine months has only reached slightly more than one-third of the plan, increasing by only 6.92% at the end of September.

Commenting on the trend of businesses choosing to deposit money in banks to earn interest in recent months, Associate Professor Dr. Dinh Trong Thinh (Finance Academy) assessed that this reflects the difficulties businesses are still facing, hence the temporary deposit of funds in banks with terms of 1-3 months. "While there are no orders, projects, or profitable investment channels at this time, it's understandable that business owners choose to deposit money in banks," Dr. Thinh commented, analyzing the context of difficult production and business conditions, while still having to maintain company operations and incur expenses such as paying salaries to employees, renting factory space, etc. Choosing to temporarily take refuge in banks to earn interest also creates additional revenue for businesses. Looking at the terms businesses choose (1-3 months), it shows that if investment opportunities or orders for production and business activities arise, this money will readily flow into the market.

Sharing the same view, Dr. Nguyen Huu Huan, Head of the Finance Department at the University of Economics Ho Chi Minh City, predicted that businesses might not have many orders, forcing them to deposit money in banks while waiting for new opportunities. However, it is also possible that businesses are showing signs of recovery, with payments from partners for previously produced orders improving compared to before. Businesses receive cash quickly, but haven't had time to plan how to use it most effectively, so they temporarily deposit it in banks.

Furthermore, current savings interest rates for the residential sector are quite low. Banks are offering rates ranging from 2.7% to 6.5% per year across various terms, with short-term deposits under 6 months only half of last year's rates. This is also the time when long-term deposits of 1 year or more with higher interest rates from individuals are maturing. With such low interest rates, this money is likely to seek investment channels for higher returns. If residential deposits flow into accounts opened by individual investors at securities companies, this money is considered corporate deposits. Recently, many investors have returned to the stock market, which could also help increase corporate deposits.

Regardless of the reason, the fact that savings interest rates have fallen while deposits from residents and businesses have increased sharply still indicates that business opportunities are not abundant at the moment.

As of September 30th, the total mobilized capital of banks reached approximately 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, reaching over 14.8 million billion VND.

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