Banks have taken many policies, including offering free money transfers and investing in digital technology to attract customers. — Photo cafef.vn Competition among banks to lure demand deposits is becoming fiercer as the cheap capital source helps banks increase their net interest income (NIM) ratio. Demand deposits have very low interest rates of only 0.1 per cent per year. Therefore, banks will have low input capital costs and ease to increase their NIM ratio if they have high current account savings account (CASA) ratio – or the proportion of 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 extremely important in retail banking strategy and many banks consider it one of the top targets in recent years. Before 2018, Vietcombank and MBBank were the two banks with the largest proportion of CASA in the banking system. While Vietcombank had an advantage in luring demand deposits through transactions of State-owned agencies and enterprises, MBBank benefited from defence agencies and enterprises. However, in the past two years, Techcombank has risen to the top and is increasingly outstripping the two banks. According to Techcombank’s financial statements,… Read full this story
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