Treasury withdraws $270 trillion from Vietcombank, BIDV and VietinBank

National treasury deposits fell to their lowest level since 2021, and the four major banks lost cheap capital. Against the background of accelerated disbursement of public investment funds at the end of the year, national treasury deposits (treasury) deposited in banks decreased significantly.

According to a report released by the General Bureau of Statistics of Vietnam on the morning of December 29, public investment funds expenditure was 625.3 trillion VND, completing 85.3% of the full-year plan, an increase of 21.2% over the previous year. In absolute terms, this is the highest level of spending ever recorded. Previously, in 2022, funds allocated for public investment reached 516.1 trillion VND, equivalent to 86% of the plan for that year, an increase of 19.9% ​​over the previous year.

At the beginning of 2023, the government required provinces and cities to accelerate public investment spending to create momentum for economic growth amid weak consumption and negative impacts on the international market.

Along with this record number, treasury deposits, once one of the main sources of cheap capital for “large” commercial banks with state capital, have also declined significantly (following a sudden increase in 2022).

According to the financial statements of the four major groups in the third quarter of 2023 (excluding Agricultural Bank of China as it has not been published), treasury deposits continue to decline significantly compared with the previous quarter and the same period.

As of September 30, 2023, the state treasury has only left approximately VND 24 trillion in three banks: Vietcombank (HM:), BIDV (HM:) and VietinBank, which is about half less than the previous quarter.

As of the end of the third quarter of 2023, the total treasury deposits in the above three banks were the lowest level since the third quarter of 2022. Compared with the end of 2022, the national treasury has withdrawn nearly 270 trillion VND from the above three major banks. At the end of the third quarter of 2023, the Bank of Vietnam became the bank with the largest national treasury deposits, reaching nearly 20.73 trillion VND, an increase of nearly 5 times from the end of the previous quarter, but still only 1/5 of the same period. Last issue: end of fourth quarter 2022.

Vietnam Commercial Bank is the giant with the second largest national treasury deposits, with a balance of VND 1,529 billion as of the end of the third quarter of 2023. This balance increased slightly from the previous quarter, but was significantly lower than at the end of last year.

On the contrary, BIDV was the bank with the largest divestment from the state treasury, which dropped from nearly VND40 trillion at the end of the second quarter to only VND141.8 million on September 30. Normally, BIDV is always the giant that the treasury chooses to deposit the most funds.

Treasury deposits are an important source of liquidity support for the four major banks, helping these banks avoid excessive customer mobilization pressure.

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