Vietnamese bankers rush to invest in neighboring markets

BIDV (the Bank for Investment & Development of Vietnam), VietinBank, Sacombank, MB and SHB all have subsidiaries or branches in the markets, while SBV has approved Vietcombank’s plans to set up a subsidiary in Laos. 

Though Vietcombank entered the Lao market later than other banks, the investment capital is higher than other banks.

The Laos-Vietnam Joint Venture Bank (LVB) set up by BIDV has charter capital of US$100 million, but BIDV only contributes 65% of the charter capital. Meanwhile, Sacombank Laos has charter capital of VND819 billion and SHB Laos US$50 million.

A senior executive of Vietcombank said a Vietcombank subsidiary would open this year in Cambodia if administrative procedures can be fulfilled.

Vietnamese banks still cannot succeed in Europe and the US because of the high competitiveness of the markets, which requires bankers to have powerful capability and prepare well for the operation. 

The operation costs in the developed markets are very high compared with SE Asia.

Analysts believe that more Vietnamese-invested banks would be set up in neighboring countries in the future because the operating banks there have been performing well.

VietinBank Laos, after five years of operation, has one main office, one large-scale transaction office in Vientiane and one branch in Champasak. 

The total assets of VietinBank Laos had reached US$222 million by December 31, 2016, an increase of 17% over 2015 and 435% over 2012. There was no bad debt.

The bank made profit in the first year of operation, US$103,000, while the figure rose to US$3 million in 2016. Encouraged by the good performance, VietinBank Laos plans to open one more branch in Savanakhet.

LVB was the first Vietnamese owned bank set up in Laos, in 1999. The bank had total assets reaching US$1.1 billion by the end of 2016, an increase of 18% over 2015.

BIDC, another bank invested by BIDV, established in 2009, is a subsidiary of IDCC (which holds a 98.5% stake). 

BIDC ranks sixth in Cambodia in charter capital, while its total assets US$740 million.

In addition to banks in Laos and Cambodia, BIDV also has a joint venture bank in Russia which reported pretax profit of VND35 billion in 2016.

Sacombank Cambodia reported total assets of US$172.3 million by the end of 2016, up by 7.3% over the beginning of the year.