Hanoi (VNS/VNA) - Foreignbanks in Vietnam have been expanding their transaction networks and increasingtheir charter capital in a bid to increase market share, especially in theretail banking sector.

Malaysian’s Public Bank VietnamLtd last week received the State Bank of Vietnam (SBV)’s approval to open threenew branches and two new transaction offices in Hanoi, Ho Chi Minh City and DaNang to raise its total network in Vietnam to 18 outlets.

The SBV also allowed the Republicof Korea’s Woori Bank Vietnam Ltd to establish branches and a transitionoffice. SBV Governor Le Minh Hung gave the bank the go-ahead to establish branchesin 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 andtransaction offices in Hanoi and HCM City, raising its total to 30 nationwide.The expansion has helped Shinhan Bank Vietnam retain its position as theforeign bank with the largest transaction network in Vietnam.

Shinhan Bank Vietnam alsoreceived the SBV’s approval to bid, purchase and sell treasury bills,negotiable instruments, Government bonds, SBV bills and othervaluable papers.

Besides enlarging theirtransaction networks, foreign banks have also invested more in their Vietnamesesubsidiaries.

The Bank of China (Hong Kong)Limited – HCM City Branch (BOC HCM), for example, on May 17 received permissionto increase its charter capital from 80 million USD to 100 million USD.

Several days earlier, the SBValso issued a document to allow the Hanoi branch of NongHyup Bank to increaseits charter capital from 35 million USD to 80 million USD.

Some foreign banks have alsoasked the SBV to extend their licences in Vietnam. For example, theSingapore-based DBS Bank in Hanoi and Thailand’s JCB International asked forpermission to extend their tenure for an additional five years in March andApril, respectively. 

In a meeting with SBV representatives in May, Pisit Serewiwattana, President ofExport - Import Bank of Thailand (Eximbank), also sought the central bank’ssupport for its first representative office in Vietnam.

ANZ, Hong Leong, HSBC, ShinHan,Standard Chartered, CIMB, Public Bank Berhad, Woori Bank and United OverseasBank Limited have opened wholly foreign-owned banks in Vietnam. The Vietnamesemarket is proving fruitful for foreign banks as many are posting betterbusiness results than their local rivals.

According to experts, moreforeign banks are expected to enter Vietnam’s market, which has major potentialwith a population of roughly 95 million.

They said that Vietnamese banksneeded to operate on a larger scale with huge investments in technology andproducts through consolidations and mergers to create stronger institutionsthat could compete with foreign banks.

By 2020, in accordance withcommitments to the World Trade Organisation, Vietnam will have to completelyopen the doors to its banking sector.-VNS/VNA