Bank deposits increase to record level due to “hunger” for investment channels
According to the State Bank, as of September 30, 2024, the total mobilized capital of the entire banking system reached 14.5 quadrillion VND. Meanwhile, by the end of August 2024, this figure had only reached 13.76 quadrillion VND.
Associate Professor, Dr. Nguyen Huu Huan (Ho Chi Minh City University of Economics) said that in the context of risky and unsustainable investment channels, people tend to deposit money in banks.
"Smart money often turns to banks to wait for opportunities from other investment channels when the market is more stable," said Mr. Huan.
In fact, although the real estate market has recovered in price, liquidity remains low. Some segments have increased rapidly but have potential bubble risks, which are not suitable for the majority of investors. The stock market is facing weak liquidity and foreign capital flows are continuously withdrawing, causing investors to lose confidence. As for the gold market, although it has grown strongly since the beginning of the year, gold prices are currently in an unpredictable adjustment phase.
Dr. Chau Dinh Linh (Banking University of Ho Chi Minh City) said that depositing money in banks is a safe option that many people prefer. Some investors choose to deposit savings to wait for opportunities when other investment channels show signs of recovery.
Banks increase interest rates to attract capital
Despite the increase in capital mobilization, credit still increased faster. By the end of September 2024, total outstanding credit reached VND 14.7 million billion, exceeding total mobilized capital by VND 200,000 billion. It is expected that by the end of the year, credit in the whole system will increase by 2%/month, equivalent to more than half a million billion VND injected into the economy.
Deputy Governor of the State Bank Dao Minh Tu said that the pressure to meet year-end credit demand forced banks to increase deposit interest rates to ensure liquidity.
According to statistics from Lao Dong, 16 banks increased their deposit interest rates in November, including: Kienlongbank, CBBank, SeABank, BaoViet Bank, HDBank, GPBank, LPBank, Nam A Bank, IVB, Viet A Bank, VIB, MB, Agribank, Techcombank, ABBank, and VietBank. Of which, MB, Agribank and VIB are the banks that have increased their interest rates twice.
Economist Nguyen Tri Hieu said that increasing deposit interest rates is necessary to reduce liquidity risks and ensure lending capital, while maintaining the stability of the financial system.
VDSC Securities Company's expert team also assessed that this move helps banks be flexible in meeting the economy's capital needs at the end of the year.
The challenge of lowering interest rates
Although the State Bank has made efforts to keep the operating interest rate unchanged in 2024, the goal of further reducing lending interest rates is facing many obstacles.
State Bank Governor Nguyen Thi Hong emphasized that pressure from international exchange rates and domestic capital demand makes reducing interest rates more difficult.
In this context, increasing deposit interest rates is not only to compete with other investment channels but also to ensure safety and liquidity for the banking system, creating a foundation to support businesses and the economy to recover sustainably.
The State Bank's viewpoint is to continue to operate a flexible monetary policy, requiring credit institutions to focus on optimizing costs, reducing lending interest rates, supporting businesses to access capital at lower costs, while controlling inflation and ensuring the safety of the banking system.
