Customers at Shinhan Bank’s Hoan Kiem Branch in Hanoi (Source: VNA)
Malaysian’s Public Bank Vietnam Ltd last week received the State Bank of Vietnam (SBV)’s approval to open three new branches and two new transaction offices in Hanoi, Ho Chi Minh City and Da Nang to raise its total network in Vietnam to 18 outlets.
The SBV also allowed the Republic of 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 Hanoi 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 Vietnam.
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 US$100 million.
Several days earlier, the SBV also issued a document to allow the Hanoi branch of NongHyup Bank to increase its charter capital from US$35 million to US$80 million.
Some foreign banks have also asked the SBV to extend their licences in Vietnam. For example, the Singapore-based DBS Bank in Hanoi 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 Vietnam.
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 Vietnam. 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 Vietnam’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, Vietnam will have to completely open the doors to its banking sector.