The total volume of cash kept in banks by individual account holders (as opposed to businesses) reached VND 6.92 quadrillion or US$272.5 billion,jup from VND 6.84 quadrillion, or US$277.3 billion, at the end of July, according to State Bank of Vietnam data.
Dan Tri has suggested that the increase in deposits is linked to rising interest rates at Vietnam’s banks.
Dau Tu Chung Khoan on the other hand has suggested that this is because people are looking for safe haven investment channels. The publication is carrying comments from Nguyen Tri Hieu, a finance and banking expert, who has said gold is ‘risky’, stocks are ‘volatile’, and real estate is too expensive which is leading many people to leave their money in the bank. This view seems to be shared by most other publications.
Notably, withdrawals of said deposits could be problematic in that outstanding loans in Vietnam, as of the end of October, exceeded the volume of bank deposits by roughly 3.7 percent. This was reportedly putting liquidity pressure on banks which has become an ongoing theme in Vietnam’s banking industry this year. The issue, however, looks to be on the credit growth end rather than with respect to deposits.
See also: It’s Time to Talk About Vietnam’s Credit Growth Policy…