Despite the ongoing run of interest rate cuts, deposits have continued flowing into the banking system. This is an omen of economic conditions getting tougher. A big surprise? Data from the General Statistics Office (GSO) showed that capital mobilization by credit institutions, as of September 20, had increased by 5.8% compared to the beginning of the year. In contrast, credit growth stood at 5.73%. The trend of capital mobilization outpacing credit growth persisted into the third quarter. The GSO data also indicated that by June 20, deposits had increased by 3.26%, while outstanding loans grew by 3.13%. That deposits are growing faster than loans has been observed throughout the year, highlighting certain challenges in the economy, especially given the significant slowdown in lending in the banking system. The first nine months of 2020 saw a higher growth rate in capital mobilization than in lending, except for 2020 when the Covid-19 pandemic significantly disrupted economic activities. During this period in 2020, capital mobilization increased by 4.04%, compared to credit growth of 10.54%. In 2021, the rates were 4.28% and 7.17% respectively, demonstrating a clear shift in these two indicators. In absolute terms, deposits at credit institutions have increased by VND685.53 trillion […]
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