German banks can enable European FTA investment

Financial linkage

In weathering the ups and downs of the global economy and the hardships haunting the Vietnamese banking sector over the past years, the five German banks operating in Vietnam have found creative ways to reinforce their presence. These banks-which include Deutsche Bank, BHF-Bank, and Commerzbank AG - have stuck it out because they comprehend the importance of financial services when it comes to cross-border trade and investment between Vietnam, Germany, and the rest of Europe.

“The strong and growing development of the German-Vietnamese business relationship has helped and encouraged us a bank to continue our activities since establishing our presence in Vietnam in 1993. This is despite difficult times such as the Asian financial crisis in 1997, the bank restructuring in Vietnam, the global financial crisis in 2008, and the current situation of Vietnamese banks faced with problem loans”, said Ho Chi Minh City-based chief representative of BHF-Bank, Phung Phuong Lan.

According to Lan, during the past 23 years BHF-Bank in Germany went through several changes in ownership. The bank, however, still maintains its representative office in Vietnam. “This continuous presence and co-operation with Vietnam is one of the best pieces of evidence for the good business relationship between the two countries”.

Jens Ruebbert, Deutsche Bank chief country officer for Vietnam, told VIR that “Our well-established branch in Ho Chi Minh City and or representative office in Hanoi are embedded in Deutsche Bank’s strong Asia- Pacific network, and are presently sufficient to cater to our corporate and institutional clients. We will further strengthen out platform by investing in new systems and technologies, to be able to offer the best-in-class services for our clients”.

Meanwhile, according to Thomas Debelic, senior representative of Commerzbank AG’s representative office for Vietnam, Cambodia, and Laos, with an increasing demand of their corporate clients’ products in Vietnam and growing export from Vietnam to Germany, their exposure to Vietnam exporters’ banks has grown substantially in recent years.

“To facilitate our corporate clients’ growing needs in Vietnam, we recently signed co-operation agreements with two preferred Vietnamese correspondent banks”, said Debelic.

“With these agreements, Commerzbank’s clients who enter the Vietnamese market have access to the whole range of banking products needed to set up operations, and Vietnamese corporates going to Europe have access to Commerzbank Group’s range of products.”

Two-way investment

The presence of these German banks does not just help German and European corporate business in Vietnam, it also assists Vietnamese exporters and investors seeking to do business in Europe. These financial institutions have the familiarity with their home markets and sufficient understanding of the local market to give both home market clients and local businesses a helping hand.

“As Vietnam becomes more integrated in the global economy, Vietnamese corporates will seek opportunities to grow,” noted Ruebbert. “For example, we are supporting cross-border trade and cross-border mergers and acquisitions, as Vietnamese companies increasingly do business with the rest of the world and broaden their international investor base.

“With Deutsche Bank’s global and Asian network and our strengths in corporate and transaction banking, we will participate in this growth by supporting our clients seeking both investment and trade opportunities”, he added. “This applies for multinational, European, and German companies doing business in Vietnam, and also for Vietnamese corporates.”

Debelic said that Commerzbank has already been facilitating this exchange. With the banks’ help, European small-and-medium-sized enterprises-particularly those that are family-owned, and those working in renewable energy-have started to consider the Vietnamese market. Some have even prepared for a market entry with sustainable products and services in the fields of photovoltaic energy, green building, and wastewater treatment.