State-owned banks in Vietnam recorded a significant increase in deposit balances from the State Treasury during the first quarter of 2023. VietinBank and BIDV had more than 45,000 billion VND each, while Vietcombank had over 3,300 billion VND. The State Treasury comprises all cash at Treasury units, with state funds available in Treasury accounts opened at the State Bank and commercial banks. Idle state funds are used for lending to the State budget and repaying principal before being deposited for a term at commercial banks through a bidding process for interest rates and term repurchase of Government bonds. By the end of 2023, nearly 7.8 million VND of idle money from the State Treasury was deposited for a term at commercial banks, earning interest of 25,100 billion VND.
In terms of business results for the first quarter, Vietcombank’s profit slightly decreased while BIDV and VietinBank saw increases. Vietcombank maintained its lead as the most profitable bank in the system with a pre-tax profit of over 10,700 billion VND but down slightly compared to the same period last year. BIDV reported an increase in pre-tax profit by nearly 7%, driven by revenue from foreign exchange trading which doubled compared to Q1 of 2023. VietinBank recorded an increase in net interest income by over 15,100 billion VND and a pre-tax profit increase by 4%. Despite these positive results, idle state funds are still being prioritized for lending to the State budget before being deposited for a term at commercial banks through bidding process for interest rates and repurchase of Government bonds to maximize benefits.
