Banks have taken many policies, including offering free money transfers and investing in digital technology to attract customers. (Photo: cafef.vn)Demanddeposits have very low interest rates of only 0.1 percent per year. Therefore,banks will have low input capital costs and ease to increase their NIM ratio ifthey have high current account savings account (CASA) ratio – or the proportionof demand deposits out of total deposits.
Besides,CASA also reflects customers' belief and assessment of banks’ service quality,especially payment services. Therefore, increasing CASA has become extremelyimportant in retail banking strategy and many banks consider it one of thetop targets in recent years.
Before2018, Vietcombank and MBBank were the two banks with the largest proportion ofCASA in the banking system. While Vietcombank had an advantage in luring demanddeposits through transactions of State-owned agencies and enterprises, MBBankbenefited from defence agencies and enterprises.
However,in the past two years, Techcombank has risen to the top and is increasinglyoutstripping the two banks. According to Techcombank's financial statements,its demand deposits in 2020 increased by 60.6 percent to 128 trillion VND (5.56billion USD). The bank’s CASA ratio by the end of 2020 reached 46.1 percent, asharp increase from 34.5 percent at the end of 2019 and also higher thanVietcombank (about 33 percent) and MB (about 37 percent).
Techcombankhas so far had an ambitious target to increase its CASA ratio to 55 percent by2025.
BesidesTechcombank, many other private banks, such as TPBank and VPBank, also postedimpressive CASA growth last year.
AtVPBank, demand deposits increased by 28 percent to more than 35.4 trillion VND,helping the bank increase its CASA rate from 13.2 percent to 15.6 percent.TPBank's demand deposits increased by 48 percent last year to more than 21.2trillion VND, pushing the bank’s CASA rate up from 16.5 percent to 19.4 percent.
Toincrease CASA, banks have taken many policies, including offering free moneytransfers and investing in digital technology to attract customers.
Techcombankcan be considered the first private bank to initiate this wave when itfocused on building advantages in payment. Since 2016, this bank hasimplemented many promotion programmes for customers such as free of chargee-banking transactions and account management.
Followingsuit, many other private banks have also entered the race of providing freeservice. VIB has introduced a policy of free of charge money transfers andwithdrawals for new customers or payment accounts with an average balance of atleast 5 million VND. Customers transferring money online via TPBank alsoreceived the free service policy.
Theincreasingly fierce competition in the race to lure demand deposits hasforced Vietcombank and MBBank to take action.
Vietcombankhas recently announced integrated transaction account packages that coveraccount services, digital banking and debit cards, helping customers transfermoney free of charge on VCB Digibank.
Meanwhile,besides implementing a series of digital products, MBBank has implemented aprogramme to open accounts with lucky numbers at the request of customers inthe past year. In 2020, the bank also offered free money transfer service onMBBank app. As a result, the bank's CASA also increased significantly from 34 percentin 2019 to 37 percent in 2020./.
VNA
