VDSC: capital mobilisation to gradually be less positive

10-Sep-2021 Intellasia | NDH | 5:02 AM Print This Post

In a report on the banking industry, Viet Dragon Securities Company (VDSC) mentioned that the growth prospect of the capital mobilisation is less positive. By the end of August, the deposits grew by 4.44 percent compared to the beginning of the year from 3.99 percent in late July.

The low savings interest rates are putting pressure on depositors, while the assigned credit growth limits have not met the expectations and the minimum requirements to optimise Net Interest Margin (NIM) of banks, making banks to reduce their need for strongly expanding the mobilisation fund. The growth momentum is being supported by the application of online savings and electronic Know Your Customers (eKYC), which helps stabilise the demand to deposit money of customers in the context of the social distancing order.

The weak economic activities which reflect the slow circulation speed has slowed down the slope of credit growth and mobilisation growth. VDSC expected that the reopening period will see less disrupted needs with stabilised driving force for credit growth. However, VDSC believed that the growth of mobilisation is likely to decline in the near future.

According to VDSC, as the mobilisation growth is less affected by disruptions than credit growth, and based on the forecast of a change in the structure of deposits of the banking industry until the end of the third quarter, the slope of the mobilisation growth trend is likely to be not enough to reach the average level of the forecast rate of 10.8%.

VDSC predicted the growth of the total mobilised deposits this year to be 9.2 12.3%, and may stop at a single-digit number even considering the seasonality of businesses’ savings demand. However, VDSC is still waiting for clearer reopening plans to assess the recovery speed before adjusting its forecast.

According to data by the end of June of the State Bank of Vietnam (SBV), the deposits of economic organisations were 4.8 percent higher than the beginning of the year, reaching 5,110 trillion dong, up by nearly 1.6 percentages compared to late May. This increase is more than one and a half times higher than the growth of people’s deposits which was 2.94%, reaching a value of around 5,290 trillion dong.

Previously, in late May, the value of deposits of economic organisations reached more than 5,030 trillion dong, up by 3.26 percent compared to the end last year, while people’s deposits were over 5,270 trillion dong, up by just 2.6%. For the first time in five years, the increase of economic organisations’ deposits surpassed people’s deposits in the first five months of the year. In the first four months of 2021, the deposits of economic organisations only grew by 2.05%, lower than the 2.34 percent growth rate recorded in the residential deposits. In May alone, businesses deposited an addition of 59.121 trillion dong, accounting for four fifth of the additional deposits in the system.

The 4.8 percent increase in deposits of economic organisations in the first half of 2021 was also the highest level in the past five years. The impact of the pandemic on business activities, concerns about risks have made businesses to accumulate money in banks.

In the recent time, the corporate savings interest rates have generally not been reduced as much as the interest rates for individual customers. On term of 12 months, corporate customers can enjoy an interest rate of 4.6 6.3 percent per annum.

In contrast, in the past five years, the residential deposits tended to slow down in the period of 2016 2020. This shows that people are tending to deposit less money in banks. The growth of residential deposits was 17.4%, 13.54 percent in 2017, and continuously fell in the following four years. By 2020, this number was 6.46%.

 

Category: Finance, Vietnam

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