A savings book of Saigon Hanoi Commercial Joint Stock Bank. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Despite interest rate cuts at commercial banks, individual deposits have continued to increase due to a lack of alternative investment options. 

Financial reports from commercial banks in the third quarter of 2023 have shown positive growth in deposit balances.

Leading the way is State-owned Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) with a deposit balance of VNĐ1.58 quadrillion (US$64.6 billion), up 7.5 per cent compared to the beginning of the year. 

Other State-owned banks such as Vietcombank and VietinBank saw deposit balances of VNĐ1.35 quadrillion ($55.2 billion) and VNĐ1.31 quadrillion ($53.5 billion), respectively, with growth rates of 8 per cent and 5 per cent.

HDBank and VPBank experienced the highest deposit growth rates. 

HDBank increased its deposit balance by 58.3 per cent compared to the start of the year, while VPBank saw a growth rate of 39 per cent. 

Other banks which also achieved strong deposit growth rates in the first nine months include VietBank (24.9 per cent), SeABank (22 per cent), and NamABank (21 per cent). 

TPBank is the only bank that saw a slight decrease in customer deposits by 0.6 per cent compared to the beginning of the year.

The 100 per cent State-owned Vietnam Bank for Agriculture and Rural Development (Agribank) has not yet published its financial report for the third quarter of 2023. 

However, in its previous semi-annual financial report, Agribank’s deposit balance ranked first in the system with over VNĐ1.69 quadrillion in the first half of 2023.

According to the latest update from the State Bank of Vietnam, total customer deposits at credit institutions as of the end of August 2023 reached over VNĐ12.4 quadrillion, up over 5.3 per cent from the beginning of the year. 

Among this amount, the deposit balance for individuals accounted for over VNĐ6.4 quadrillion, a rise of 11.8 per cent compared to the beginning of the year.

Trần Xuân Bách, an analyst at Bảo Việt Securities Company, said the stagnant real estate market and unpredictability in other investment channels have made bank deposits a safe option for investors, despite the continuous decrease in interest rates.

Savings interest rates at commercial banks continue to slide, with rates for 12-month deposits at major banks plummeting to below 5.5 per cent per year, which is lower than during the pandemic period.

The trend of decreasing deposit interest rates is expected to continue until the end of the year. — VNS