State Treasury deposit balances at three state-owned banks more than doubled in the first quarter, of which VietinBank and BIDV recorded more than 45,000 billion each.
State-owned banks, including Vietcombank, VietinBank and BIDV, have just released their first quarter consolidated financial statements. In particular, the State Treasury’s deposit balance at these banks increased sharply in the first three months of this year.
At VietinBank, the treasury agency had a deposit balance in VND at the end of the first quarter of VND 45,445 billion, more than double the amount at the end of 2023.
Similar to BIDV, the size of the State Treasury’s deposits is 40,000 billion VND in term deposits and more than 5,500 billion VND in demand deposits. This number doubles the balance of more than VND 19,000 billion deposited at the end of 2023.
Vietcombank has the lowest balance among the three banks, more than 3,300 billion VND. But this number is also more than 4 times higher than the beginning of the year.
State treasury is all cash at Treasury units; State funds are available on Treasury accounts opened at the State Bank and commercial banks.
Currently, temporarily idle state funds are used in order of priority, including lending to the State budget to offset overspending, repaying principal and making advances when revenue has not “returned” in time. This amount is deposited for a term at commercial banks according to the principle of competitive bidding on interest rates and term repurchase of Government bonds.
To maximize benefits from idle money, the State Treasury often deposits payment (non-term) and term money at commercial banks. This is a good source of capital that many banks desire, but not everyone has access to it.
By the end of 2023, in nearly 7 years, nearly 7.8 million VND of idle money of the state treasury was deposited for a term at commercial banks, earning an interest of 25,100 billion VND.
Regarding first quarter business results, minus Vietcombank’s profit decreased slightly over the same period, BIDV and VietinBank both recorded an increase.
Accordingly, Vietcombank – the bank with the highest profit in the system – maintains the lead with pre-tax profit of more than 10,700 billion VND, down slightly over the same period.
Net interest income and revenue from services reached VND 14,078 billion and VND 1,441 billion, respectively, down slightly compared to the first quarter of last year. Meanwhile, net profit from foreign exchange trading – a strong area of Vietcombank – decreased by nearly 30%, to 1,200 billion VND.
Net profit from other activities also narrowed by half. As a result, this bank’s net profit from business decreased by more than 7%, to VND 12,226 billion.
Thanks to a 25% decrease in provisioning costs over the same period last year, this bank recorded a pre-tax profit of VND 10,700 billion, down less than 5%.
Compared to Vietcombank, BIDV and VietinBank have more positive results. BIDV reported pre-tax profit for the first quarter of nearly 7,400 billion VND, an increase of 7% compared to the first quarter of 2023. Unlike Vietcombank, this bank’s revenue from foreign exchange trading doubled over the same period, reaching more than 1,400 billion VND. Net interest income decreased slightly to 13,500 billion VND, while services were nearly 1,700 billion VND.
BIDV’s net operating profit narrowed partly due to increased operating costs, but was offset by a 20% lower provisioning.
VietinBank recorded net interest income of more than 15,100 billion VND, an increase of nearly 20%. Operating costs increased by 10%, VietinBank’s net profit from business still expanded over the same period. This bank’s provision costs increased nearly 20% in the first quarter. As a result, VietinBank’s pre-tax profit was VND 6,200 billion, up 4% over the same period last year.