State-owned conglomerates are ‘cash kings’ Many Vietnamese enterprises now have large amounts of cash and have deposited them in banks to make profits.   The national oil & gas group PetroVietnam is expected to be the enterprise which holds the largest amount of cash. Its 2015 financial report showed that it has VND102 trillion worth of deposits at banks, including VND25.273 trillion worth of demand deposits, and VND76.343 trillion worth of short-term deposits. The huge amount of deposits brought interest of VND7 trillion to the corporation in 2015. Another ‘cash king’ is Sabeco, the brewer holding the largest domestic market share. By the end of June 2016, Sabeco had held VND8.2 trillion worth of cash which it deposited at banks for no more than three months and enjoyed the interest rates of 5.5-6.2 percent per annum. It had VND1.165 trillion worth of long-term deposits with interest rates of 6.2-7.2 percent per annum. With the huge amount of cash, the company’s biannual financial turnover reached VND678 billion, making a great contribution to its post-tax profit. Many Vietnamese enterprises now have large amounts of cash and have deposited them in banks to make profits. Habeco, the second largest brewer, has been reported as holding VND3.2 trillion in cash, including VND2.3 trillion in fixed-term and demand deposits. Even SCIC, the State Capital Investment Corporation (SCIC), the powerful state-owned corporation compared with Singaporean Temasek, specializing in making investment in businesses with the state’s money, also deposited large amounts of money at banks to make profits. By December 31, 2015, SCIC had deposited VND25 trillion at banks which brought VND1 trillion in interest to the corporation. It also hopes to earn VND1 trillion from deposit interest this year. By the end of June, the Vietnam Post and Telecommunication Group (VNPT) had VND5.344 trillion in cash. Bao Viet, the Vietnamese biggest insurer, had VND16 trillion. Meanwhile, Vinataba, the largest tobacco corporation, held VND2.896 trillion by the end of 2015, most of which was deposited at Vietcombank. An analyst commented that the decision by a series of businesses to keep cash instead of making investment shows their embarrassing situation. The businesses find it more profitable to deposit money at banks than injecting money into production or business. “Businesses have to face the risks of exchange rate fluctuation and inflation increase when keeping cash. This shows they cannot find more profitable investment channels than depositing money at banks,” he said. Thoi Bao Kinh Te Vietnam quoted a senior executive of a state-owned enterprise as saying that the enterprise decided to deposit idle money at a bank while the enterprise was still looking for reasonable investment channels. The executive said every business wants to make investments to earn more money, but things sometimes do not go the way they want. Therefore, depositing money is a good choice. Mai Chi, VNN