Wholly foreign-owned banks are prepared to compete with Vietnamese peers for market share through network expansion, especially in major cities and provinces with large industrial parks, according to the Tri Thuc Tre newspaper.
Illustration photo.
|
However, things began to change in this year, with more foreign banks expanding their business networks and opening more transaction offices across the country. Some of them have expressed an ambition to get a foothold in Vietnam's market, especially in retail banking.
On July 2, Public Bank Vietnam, a wholly owned subsidiary of Public Bank in Malaysia, was given approval from the State Bank of Vietnam (SBV) to open three additional branches and two more transaction offices this year, increasing its total number of branches in Vietnam to 18.
Similarly, in early June, Woori Bank was also allowed to open five branches and a transaction office in Vietnam, locating in provinces with large industrial parks such as Thai Nguyen, Ha Nam and Binh Duong.
Shinhan Bank Vietnam in the middle of May opened four branches and transaction offices in Hanoi and Ho Chi Minh City, bringing the bank's nationwide network to 30 branches and transactions offices - the largest network of a foreign bank in Vientam.
Also in May, the Hanoi branch of NongHuyp Bank - the largest South Korean bank - and the Ho Chi Minh City branch of Bank of China (Hong Kong) received permission from the SBV's governor to increase charter capital from US$35 million to US$80 million for the former, and from US$80 million to US$100 million for the latter.
Singapore-based DBS Bank in Hanoi and Thailand's JCB International asked for permission to extend their presence 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), sought the Vietnamese central bank's support for its first representative office in Vietnam.
Vietnam's market is fast becoming an attractive investment destination for foreign banks. However, there are still some reasons for concern. Thailand-based Krungsri Bank decided to delay its business expansion plan in Vietnam after having studying the market for two years.
According to the bank, a-higher-than-expected expenses for merger and acquisition (M&A) activities, complicated procedures and licenses are some of the reasons behind its decision.
Nevertheless, despite having a rather small business network, most of the nine wholly foreign-owned banks in Vietnam posted a significantly higher revenue compared to domestic banks with similar equity and assets. By expanding their networks, foreign banks are stepping up efforts to compete with domestic banks for a higher market share.
