Foreign banks enlarge operations in Viet Nam
Foreign banks enlarge operations in Viet Nam
Foreign banks in Viet Nam have been expanding their transaction networks and increasing their charter capital in a bid to increase market share, especially in the retail banking sector.
Malaysian’s Public Bank Vietnam Ltd last week received the State Bank of Viet Nam (SBV)’s approval to open new three branches and two new transaction offices in Ha Noi, HCM City and Da Nang to raise its total network in Viet Nam to 18 outlets.
The SBV also issued Document No 4660/NHNN-TTGSNH on June 21, 2018 to allow South Korea’s Woori Bank Vietnam Ltd to establish branches and a transition office. SBV Governor Le Minh Hung gave the bank the go-ahead to establish branches in the provinces of Thai Nguyen, Ha Nam, Hai Phong, Dong Nai and Binh Duong, and a transaction office in HCM City.
In mid-May, another Korean Bank - Shinhan Bank Vietnam - also established four additional branches and transaction offices in Ha Noi and HCM City, raising its total to 30 nationwide. The expansion has helped Shinhan Bank Vietnam retain its position as the foreign bank with the largest transaction network in Viet Nam.
Shinhan Bank Vietnam also received the SBV’s approval to bid, purchase and sell treasury bills, negotiable instruments, Government bonds, SBV bills and other valuable papers.
Besides enlarging their transaction networks, foreign banks have also invested more in their Vietnamese subsidiaries.
The Bank of China (Hong Kong) Limited – HCM City Branch (BOC HCM), for example, on May 17 received permission to increase its charter capital from US$80 million to $100 million.
Several days earlier, the SBV also issued Document No 3455/NHNN-TTGSNH to allow the Ha Noi branch of NongHyup Bank to increase its charter capital from $35 million to $80 million.
Some foreign banks have also asked the SBV to extend their licences in Viet Nam. For example, the Singapore-based DBS Bank in Ha Noi and Thailand’s JCB International asked for permission to extend their tenure for an additional five years in March and April, respectively.
In a meeting with SBV representatives in May, Pisit Serewiwattana, president of Export - Import Bank of Thailand (Eximbank), also sought the central bank’s support for its first representative office in Viet Nam.
ANZ, Hong Leong, HSBC, ShinHan, Standard Chartered, CIMB, Public Bank Berhad, Woori Bank and United Overseas Bank Limited have opened wholly foreign-owned banks in Viet Nam. The Vietnamese market is proving fruitful for foreign banks as many are posting better business results than their local rivals.
According to experts, more foreign banks are expected to enter Viet Nam’s market, which has major potential with a population of roughly 95 million.
They said that Vietnamese banks needed to operate on a larger scale with huge investments in technology and products through consolidations and mergers to create stronger institutions that could compete with foreign banks.
By 2020, in accordance with commitments to the World Trade Organisation, Viet Nam will have to completely open the doors to its banking sector.
