Japanese FDI inflow to Vietnam in 1Q/2018 is lower than South Korea and Singapore, but Mr. Mochizuki Masashi – Senior Director of Japanese Customers, who has more than 24 years of experience working at Sumitomo Mitsui Banking Corporation, says that it is too early to compare FDI in 2018 between countries investing in Vietnam. “We don’t worry too much about the ‘downtrend’ of Japanese investment,” he added.
Mr. Mochizuki Masashi – Senior Director of Japanese Customers
1. Reporter: When SMBC started its investment in Eximbank in 2008, it’s said that one of expectations of the Tokyo-based bank is increasing its support and financial services to Japanese customers in Vietnamese market. I am wondering whether SMBC has gained the targets.
Mr Mochizuki: Since the beginning of the strategic partnership, the 2 banks have built a mutual cooperation structure for supporting Japanese customers’ activities in Vietnam. In principle, Japanese customers are introduced by SMBC and we have enjoyed opportunities to transact with such Japanese customers. In return, we provide banking services which SMBC cannot provide in this market, such as retail services. Consequently, this synergetic collaboration can create value-added service for Japanese customers as well as attract more Japanese customers to transact with SMBC in Vietnam.
2. Reporter: In the first quarter of this year, Japanese investment in Vietnam is lower than others such as South Korea, Hong Kong and Singapore. As a strategic partner of Eximbank which is providing corporate advisory and financial services for Japanese investors, do you worry about that? Could you explain about such low investment from Japan in early months of the year?
Mr Mochizuki: In accordance with the statistics figures disclosed by GSO (General Statistics Office of Vietnam), Japanese direct investment to Vietnam is lagging behind compared with Korea and Singapore.
(FDI progress in 1Q 2018 / Top3)
However, as shown below, Japanese FDI showed a great result in 2017, and 1Q 2018 result above only consists small portion of total FDI capital.
(FDI achievements in 2017 / Top3)
Considering the situation, it can be said that it is too early to recognize/decide investment trend of 2018 at this moment, and we don’t worry too much about “downtrend” of Japanese investment.
3. Reporter: In recent years, many Japanese companies have increased their investment in agriculture, retail and financial services in Vietnam instead of manufacturing. What has Eximbank done to meet demands of those companies?
Mr Mochizuki: In addition to the conventional banking services, we’ve started variety of services to meet our Japanese customers’ demand, and supply chain financing is one of our focused programs which will support not only Japanese Investors but also Vietnamese local suppliers/distributors/end-users; and this program can be applied for many industries including food, agriculture sectors, and retail industry. Following the increasing trend of direct investment, we’ve started our support program for Japanese Direct Investors, and this program can streamline investment process and help achieve more investment in a variety of industries including financial services.
Regarding the strategic investment of SMBC at Eximbank, we talked further with Mr. Yutaka Moriwaki – Member of the Board of Directors – Senior Director and Head of the Eximbank Restructuring Project.
Mr. Yutaka Moriwaki – Member of the Board of Directors – Senior Director and Head of the Eximbank Restructuring Project
4. Reporter: As a strategic partner of Eximbank, what has SMBC done to provide technical support for the Vietnam-based bank as well as to enable the bank to meet Japanese standards, including corporate governance, quality and risk management?
Mr Moriwaki: Since the investment by SMBC on Eximbank in 2008, we have a Strategic Alliance Agreement aimed at mutually complementing know-how and experience of SMBC in the areas of wholesale and retail banking, corporate governance and other banking business.
5. Reporter: There have been ups and downs in Eximbank in recent years, what does SMBC evaluate the situation? Does SMBC decide to maintain its investment in the local bank?
Mr Moriwaki: I’m not in the position to comment on SMBC’s views, but from our own perspective as Eximbank’s representatives, Eximbank’s business trend is showing marked improvement under the current management.
I believe the most important mission now is to improve corporate governance as well as risk management platform to support sustainable growth.
That’s why Eximbank looks to SMBC to support not only for business promotion, but also for enhancing capabilities and knowledge transfer in other functions such as strategic planning and risk management.
6. Reporter: Eximbank used to be a strong and well-known bank, what is SMBC doing to help the bank take back the position?
Mr Moriwaki: Eximbank set up a Mid-term strategy recently. Among several initiatives, one example of SMBC’s support is to enhance trade finance solutions for corporate clients by special product skills as well as SMBC’s overseas network to regain “Export Import Bank” brand name.
7. Reporter: Could you share about business strategy of SMBC in Vietnamese market?
Mr Moriwaki: I’m not in the position to comment on the business strategy of SMBC. From Eximbank’s perspective, we appreciate the collaboration with SMBC by sending personnel and delivering expertise to support our initiatives including the current “New Eximbank” project.
Talking about progress of “New Eximbank”, in 2017, we focused on fixing problem of Eximbank foundation, namely, (1) HR system reformation, (2) Build Mid-term Strategy, and (3) Reorganization of HO to enhance support to sales network.
In 2018, we will start implementing Mid-term strategy in place.
8. Reporter: Could you share more about Mid-term strategy of Eximbank?
Mr Moriwaki: BOD has approved mid-term strategy earlier this year. Our goal is that Eximbank will regain market leadership position in some focused segments to be the leading high-quality commercial bank in Vietnam.
In business, while we are targeting to grow our total assets by 20%, we plan to improve NIM (Net Interest Margin) and fee business such as Bancassurance, Credit Card, and settlement business. SME/MME is the core customer base where we selected 10 focused industries to provide more customer-oriented products and services, while we also enhance business with Large corporate and FDIs leveraging on our trade finance solution capabilities.
For internal control, we will upgrade our IT to improve critical features such as Customer Relationship Management (CRM), and Management Information System (MIS), as well as credit risk management. In order to improve productivity of our operation, we will proceed with Centralization of operation.
In 2017, Eximbank announced “New Eximbank” project with the support from strategic partner, Sumitomo Mitsui Banking Corporation (SMBC). Objective of the project is to regain market leadership in Trade finance, enhance providing solution capability as well as building a solid customer base
In internal control, Eximbank is putting in place KPI and performance evaluation system, reviewing and reforming remuneration system, reorganizing Head Office in 7 divisions and reducing number of Deputy CEO, reviewing and reforming Credit Process
Thank you very much.
By Nguyet Tran, Vietnam Insider