With the cost of capital close to zero, demand deposits (CASA) are being actively promoted by banks with many solutions, with the expectation of helping banks maintain and expand profit margins (NIM) and be more active in lending activities.

All banks have set CASA growth targets in their long-term business strategies.
Photo: ST

CASA strongly improved

Currently, banks have announced business results for the first quarter of 2021 with very positive profits. According to experts, the growth of banks was due to improved profit margins (NIM), as well as banks' optimization of operating costs and capital mobilization costs.

At the same time, non-interest income sources such as service activities and insurance business also grew strongly, bringing stable income for banks. In particular, in terms of CASA ratio, there are three banks with the highest CASA ratio are still Vietcombank, MBBank and Techcombank. Techcombank continued to lead with a CASA ratio of 44.2%, although a slight decrease from 46.1% at the end of 2020. In second place was MB with a CASA ratio of 33.7%, down more than 3% compared to the end of 2020. Vietcombank also reached over 20%.

In addition, according to the business results for the first three months of 2021, some banks recorded a sharp increase in demand deposit balance such as: Kienlong bank increased by 66%; MSB increased by 15.88%; VIB increased by 7.38%; VPBank increased by 9.28%; ACB increased by 2.44%; Sacombank increased by 3.62%.

This has pulled up the CASA ratio at banks such as: Kienlong bank increased from 3.19% to 4.67%; MSB increased from 26.64% to 32.34%; VPBank increased from 15.45% to 16.97%; ACB increased from 21% to 21.5%.

However, in the opposite direction, there were still some banks with a decrease in CASA ratio such as: LienVietPostBank, OCB, SHB, Eximbank.

The banking industry report of Vietnam Construction Securities Joint Stock Company (CSI) said that the average NIM of the whole industry will increase slightly to about 3.6% as CASA at banks continues to grow, helping to reduce capital costs and lending interest rates will gradually increase as preferential lending policies are narrowed along with the recovery of the economy. Therefore, CSI experts predict that in 2021, the "fight" for CASA market share will be hotter with the participation of big banks and a series of transaction-free policies.

Can not "slow down"

Demand deposits are an important component of commercial banks' capital mobilization. Moreover, this is considered a cheap source of capital when it has an interest rate of only 0.1-0.2%/year.

Therefore, for many banks, increasing the proportion of CASA is placed in the long-term business strategy. At Techcombank, Mr. Ho Hung Anh, Chairman of the Board of Directors said Techcombank maintains the development strategy of CASA with the goal that by 2025, this ratio of Techcombank will reach 55%. To achieve this result, Techcombank leaders said, the bank has promoted investment in digitalization with a modern technology platform.

At ACB, the ratio of CASA has improved, in which retail CASA leads the growth, accounting for about 65% of total CASA, thanks to many programs such as banking for employees, free online transfer, free withdrawal fee for new accounts.

With MB, retail CASA also increased strongly, making up for the decline of corporate CASA, thanks to a number of initiatives for customers when using e-banking applications, such as allowing customers to open bank accounts with a bank account number coinciding with the phone number.

It can be seen that the race for CASA is increasingly fierce when banks offer free e-banking services. It is worth mentioning that not only small and medium-sized banks, many "big" banks that were previously "entrenched" to collect payment service fees have also caught up with the "0 dong" game.

If they are slow, customers will turn to other banks. Financial expert Dr. Huynh Trung Minh explained, the bank does not lose money when applying the free online transaction policy, because many customers are willing to put a lot of money in the payment account, thereby helping the bank to mobilize capital.

Moreover, this activity also helps the bank to have a customer database to assess the financial ability in credit granting.