Many foreign banks in Vietnam have been expanding their transaction networks and increasing their charter capital in a bid to increase market share, especially in the retail banking sector.
According to a report on Vietnam News, Malaysian’s Public Bank Vietnam Ltd last week received the State Bank of Vietnam (SBV)’s approval to open new three branches and two new transaction offices in Hanoi, HCM City and Da Nang to raise its total network in Vietnam to 18 outlets.
The SBV also issued new document 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 Nguyên, Ha Nam, Hai Phong, Đong Nai and Bnh Duong, and a transaction office in HCMC.
July 20, United Overseas Bank said that it has received an in-principle foreign-owned subsidiary bank (FOSB) license from the State Bank of Vietnam. The license allows UOB to broaden and deepen its support for businesses and consumers in the country.
In mid-May, another Korean Bank – Shinhan Bank Vietnam – also established four additional branches and transaction offices in Hà Nội 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 – HCMC Branch (BOC HCMC), 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 Hanoi 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 licenses 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 UOB 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 Organization, Vietnam will have to completely open the doors to its banking sector.