Companies increase deposit amounts to maximise interest earnings

Due to challenging business conditions and high deposit interest rates earlier this year, many companies were quick to increase their deposit amounts to earn interest.

As of the end of 2023, Mobile World Investment Corporation (MWG) held 24.3 trillion VND (990.4 million USD) in cash and cash equivalents.

MWG increased its cash holdings amid difficulties faced by its retail chains, The Gioi Di Dong and Dien May Xanh, due to weak consumer demand and fierce competition. This strategy contributed to the company's financial revenue reaching 2.16 trillion VND for the whole year of 2023, a 65% increase compared to 2022. After deducting financial costs of 1.55 trillion VND, MWG achieved a net profit of over 600 billion VND from this segment, which helped the company escape losses.

Petrovietnam Gas JSC (GAS) owned the largest cash amount on the stock market as of December 31, 2023, reaching 40.7 trillion VND (approximately 1.7 billion USD). This figure increased by over 6 trillion VND since the beginning of the year and continued to rise by more than 700 billion VND compared to the end of the third quarter of 2023. With such a massive cash reserve, PV Gas earned 2 trillion VND in interest from deposits in the past year, a 67% increase compared to the previous year. This translates to a daily interest income of 5.5 billion VND from bank deposits. Meanwhile, the company's interest expenses for the entire year amounted to only 340 billion VND.

Over the past year, Binh Sơn Refining and Petrochemical Company Limited (BSR) also recorded a significant increase of 52% in financial revenue compared to the same period, reaching 2.66 trillion VND. This was mainly due to nearly 1.6 trillion VND in interest from deposits and over 1.05 trillion VND in exchange rate differences. BSR held a cash balance of 38.12 trillion VND at the end of the year, an increase of approximately 13.1 trillion VND compared to the beginning of the year.

After divesting from PGBank, Vietnam National Petroleum Group (PLX) experienced a strong 60% increase in cash compared to the beginning of the year, reaching nearly 30 trillion VND. The company generated 2.74 trillion VND in financial revenue in 2023, a 27% increase compared to the same period. This included 1.17 trillion VND in interest from deposits and loans, a 35% increase. Conversely, interest expenses also rose sharply by 40% compared to the same period, reaching over 900 billion VND.

The Airports Corporation of Vietnam (ACV) reported a cash balance of nearly 28.8 trillion VND, a decrease of over 4 trillion VND compared to the beginning of the year. The company earned more than 1.6 trillion VND in deposit interest throughout 2023, the same as in 2022. The interest expense was only about 67 billion VND as ACV had minimal short-term borrowings (410 billion VND). The long-term debt of over 10 trillion VND mainly came from ODA sources with low-interest rates.

FPT Corporation (FPT) recorded a cash balance of 24.38 trillion VND at the end of 2023, an increase of nearly 4.9 trillion VND over the year. Deposit interest income in 2023 amounted to over 1.64 trillion VND, a 22% increase compared to the previous year. The interest expense was 832 billion VND.

The Vietnam Dairy Products Joint Stock Company (Vinamilk or VNM) held over 23 trillion VND in cash. The company earned over 1.5 trillion VND in deposit interest in 2023, a 28% increase compared to 2022. Meanwhile, the interest expense amounted to only 354 billion VND.
The Viettel Global Investment Joint Stock Company (Viettel Global or VGI) also had over 23 trillion VND in cash, an increase of more than 6 trillion VND since the beginning of the year. The company earned over 1.2 trillion VND in deposit interest in 2023, a 38% increase compared to the same period. Conversely, interest paid on loans was only 375 billion VND.

Saigon Beer-Alcohol-Beverage Corporation (Sabeco or SAB) reported 22.8 trillion VND in cash, a 3% decrease compared to the beginning of the year. With a significant deposit amount, Sabeco earned nearly 1.4 trillion VND in deposit interest in 2023, a nearly 36% increase compared to 2022. The interest expense was only 50 billion VND as the total debt was only 700 billion VND./.