Banking restructuring process benefits both customers and banks

Reporter: Regional and global economies are forecast to face numerous challenges in 2013. How will Vietnam be affected?

Tareq Muhmood: Vietnam is part of the global supply chain. Europe and the US are recovering from the financial crisis. China’s economy is also rebounding. There is a dynamic change in the world economy, and Vietnam is part of that story.

A lot of Japanese and Korean businesses are investing in Vietnam, sometimes relocating their factories from China to Vietnam to benefit from cheaper labour and export market access.

The electronic export segment has grown dramatically year on year. The agricultural sector is also enjoying rapid export growth, especially rice, coffee, and rubber commodities. For ANZ, we support export companies, supply chains, and retail customers. We are optimistic about the potential for further growth of our business.

I don’t believe the banking sector will be impacted by most global economic fluctuations. The domestic situation is more influential. It’s very important for each bank to take steps to clean up its balance sheet and maintain enough capital to guarantee the validity of their accounting. It’s a good time for banks to improve their health in support of the local economy.

Reporter: ANZ Vietnam has achieved significant growth in recent years despite global and domestic economic difficulties. Can you share some secrets behind those achievements?

Tareq Muhmood: In recent years, ANZ has made large investments in Vietnam. In 2009 we actually established a Vietnamese cooperative entity with US$150 million in capital. We retain all profits inside the bank to internally strengthen capital flows. We have a long-term commitment to the country as we benefit our technology and risk management capacity, as well as from ANZ’s internationally renowned relationships with its clients.

We are very confident of achieving success in our operational areas. We have a good relationship with other banks and support both local and foreign companies in Vietnam. It is very exciting that entrepreneurs whose mothers and fathers achieved success in Vietnam have expanded into the garment, footwear, agriculture, or fisheries sectors and ANZ is here to support them.

Reporter: Do you think that recent M&As in banking industry pose challenges for international banks, including ANZ?

Tareq Muhmood: I think that M&As within the banking sector and the non-banking sector are positive provided the strategies of the two merging companies complement each other. When strategies are not complementary, problems will arise for staff, customers, and IT systems.

In the banking sector, M&As are useful when banks’ capacities are weak and capital levels are low. I hope that if any bank deems itself too weak, it would voluntarily approach a stronger potential partner for a merger.

Reporter: ANZ is one of first successful international banks operating in Vietnam. What is the bank’s development strategy in Vietnam in the coming years?

Tareq Muhmood: We have a vision for the long term. We do not see ANZ as a foreign bank, but a bank, part of the fabric of the country. In fact, we are the first international bank to join the Vietnam Banking Association.

ANZ plays a meaningful role in Vietnam’s economic development and supports its population’s financial management. We have clear branch growth plans and are developing banking solutions for different mobile and tablet devices as well as advancing core capabilities. Our branches and offices are beautiful.  I don’t think we are looking to open hundreds of additional branches. We are already in the first year of the three-year business strategy and it has started very well.

ANZ has a strong balance sheet and is very careful with our risk management.  We are lucky that we are in a strong position regarding our balance sheet, credit, and provision levels—we are confident we can help customers through any difficult periods. The interest rate drop on the Vietnamese Dong has encouraged prospective apartment buyers. We hope to help assist our customers buy their own homes. For example, we have recently offered a two-year fixed mortgage rate of 12.5 percent per annum for any new drawdown.

Reporter: What is your assessment of Vietnam’s current banking restructuring process? How will ANZ benefit from this process?

Tareq Muhmood: We regularly discuss the industry as a whole with many local banks. We feel that we are part of the banking industry. We are aware of the industry’s pain. Increasing competition would help the market develop as well. 2012 was a hard year, a year of change.

However, we also took the opportunity to develop closer relationships with customers lacking support from other banks. We lent to many Vietnamese companies and businesses to protect their growth during the challenging time.

On the occasion of the Lunar New Year (Tet) holiday, I would like to say a big “Chuc mung nam moi!” to all VOV readers and listeners welcoming the year of snake. I was born in the year of the rat, so I believe 2013 will be a wonderful year for me, our staff, and our customers.

Reporter: Thank you!