Hanoi (VNA)♓ - Banks are investing significantly in retailbanking services instead of only focusing on corporate lending in the hope ofgaining higher profits from the potential segment this year.

With more than93 million people and sharply increasing consumption, Vietnam isconsidered a hot destination for the retail banking segment, which is why bankshave strategically planned to boost the segment. In fact, the in-cash habit of Vietnamese peopleis no longer an obstacle to the development of card network and non-creditservices. Thus, several banks are aiming to bring customers a variety ofnon-traditional credit services, such as savings and transactional accounts,mortgages, personal loans, debit and credit cards. Notably from the beginning of this year, manybanks have considerably improved the quality of retail banking services toenhance competitiveness in the market. They are also focusing on other aspectssuch as marketing, technology and human resources to attract more individualcustomers to non-credit services.  Nguyen Thanh Nhung, general director ofVietBank, said retail banking services would be a key to make a sustained andstable profit for the banking sector this year. The development of non-creditservices contributes to diversifying bank’s services, thereby bringing morecustomers. This type of service would also disperse risks and create higherprofits for commercial banks, said Nhung. According to Nguyen Dinh Tung, general directorof the Orient Commercial Joint Stock Bank, his bank is expected to earn apre-tax profit of more than 1 trillion VND (44.05 million USD) in 2018, thanksto specific strategies in sales of financial products, especially in non-creditservices. Tran Du Lich, a member of theNational Financial and Monetary Policy Advisory Council, said banks currently notonly gain profits from lending but also live on retail segment, so the move toinvest in retail services is inevitable in the future. The move was decided after the retail bankingsegment contributed to a large amount of the total profits of many banks lastyear. The Bank for Investment and Development ofVietnam (BIDV), for example, gained a record high in profit last year, thanks to afocus on retail banking segment. Specifically, the bank’s segment last yeargrew by 33 percent against the previous year, helping net income from thesegment increase by 35 percent from 2016. The Military Bank also saw a sharp increase of 34percent in net income from retail banking services last year. Based on the results gained, leaders of commercialbanks said they would continually apply this business strategy, with a focus onretail banking services next time.-VNA