State Treasury deposits nearly 100,000 billion VND at three banks

State-owned banks, including Vietcombank, VietinBank and BIDV, have just announced their consolidated financial reports for the first quarter. Of which, 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 VND deposit balance of VND 45,445 billion at the end of the first quarter, more than double that at the end of 2023.

Similar to BIDV, the State Treasury's deposit size is VND40,000 billion in term deposits and more than VND5,500 billion in non-term deposits. This figure is double the balance of more than VND19,000 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 at the beginning of the year.

State treasury is all cash at Treasury units; State funds in Treasury accounts opened at the State Bank and commercial banks.

Currently, the temporarily idle state budget is used in order of priority, which is to lend to the state budget to cover the deficit, repay the principal and make advances when the revenue has not "arrived" in time. This amount is deposited for a term at commercial banks according to the principle of competitive bidding for interest rates and term repurchase of government bonds.

To maximize the benefits from idle funds, the State Treasury often deposits payment (non-term) and term funds at commercial banks. This is a good source of capital that many banks desire, but not everyone has access to.

By the end of 2023, in nearly 7 years, nearly 7.8 million billion VND of idle state budget funds were deposited for a term at commercial banks, earning interest of 25,100 billion VND.

Accordingly, Vietcombank - the bank with the highest profit in the system - maintained its lead with pre-tax profit of more than VND 10,700 billion, a slight decrease compared to the same period.

Net interest income and service income reached VND14,078 billion and VND1,441 billion, respectively, down slightly compared to the first quarter of last year. Meanwhile, net income from foreign exchange trading - Vietcombank's strength - fell nearly 30% to VND1,200 billion.

Net profit from other activities also narrowed by half. As a result, the bank's net profit from business decreased by more than 7%, to VND12,226 billion.

Thanks to a 25% decrease in provisioning costs over the same period last year, this bank recorded pre-tax profit of VND10,700 billion, down less than 5%.

Compared to Vietcombank, BIDV and VietinBank had more positive results. BIDV reported pre-tax profit in the first quarter of nearly VND 7,400 billion, up 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 VND 1,400 billion. Net interest income decreased slightly to VND 13,500 billion, while service income was nearly VND 1,700 billion.

BIDV's net operating profit narrowed partly due to increased operating expenses, but was offset by a 20% lower provision.

Meanwhile, VietinBank recorded net interest income of over VND15,100 billion, up nearly 20%. Operating expenses increased by 10%, while VietinBank's net profit from business still expanded compared to the same period. The bank's provision expenses increased by nearly 20% in the first quarter. As a result, VietinBank's pre-tax profit was VND6,200 billion, up 4% compared to the same period last year.