Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - The competition in the Vietnamese finance and bankingmarket has become fiercer as existing foreign institutions are rushing toincrease capital even as new entrants continually join themarket.
This weekalone, the State Bank of Vietnam (SBV) announced it had approved capitalincreases for the Public Bank Vietnam Limited and Shinhan Bank Vietnam, a movethat paves the way for the foreign banks to expand their operations in Vietnam.
Malaysia’sPublic Bank Vietnam Ltd July 9 received the SBV’s permission to increaseits charter capital from 3.65 trillion VND (156.65 million USD) to 6 trillionVND (257.85 million USD).
A dayearlier, the SBV issued Document No 5096/NHNN-TTGSNH to allow the Republic ofKorea’s Shinhan Bank Vietnam to increase its charter capital from 4.55 trillionVND (193.4 million USD) to 5.71 trillion VND (245.4 million USD).
Besidesthe capital hikes, some foreign banks have also asked the SBV to extend theiroperation licences in Vietnam. On July 8, Japan’s Sumitomo Mitsui BankingCorporation in HCM City got the SBV’s permission to extend their tenure for anadditional 99 years.
Foreignbanks are also promoting their in-depth development in the Vietnamese market.Among them, the Woori Bank Vietnam Limited late last month received approvalfrom the SBV’s Governor to add stock depository services to its licence.
But themost notable moves by foreign investors have been in retail banking,especially consumer finance, which was previously considered a pointof strength for domestic credit institutions.
On July2, Shinhan Card, the leading credit card issuer in the RoK, opened the ShinhanVietnam Finance Limited Company (Shinhan Finance) in HCM City. It is a 100percent foreign-owned consumer finance firm.
A fewdays earlier, on June 25, the LOTTE Finance Company (LOTTE Finance) alsoofficially launched in the Vietnamese market after six months of doing business.
Risinginflow
The SBV’sstatistics showed that the growth rate of equity capital and charter capital offoreign joint-venture banks was always two to three times higher than that ofboth State-owned and private Vietnamese commercial banks.
As of theend of April, the equity capital of foreign joint venture banks had increasedby 8.7 percent to more than 177 trillion VND (7.6 billion USD), while thegrowth rate of State-owned commercial banks was 5.06 percent and of privateVietnamese commercial banks was 4.18 percent.
Similarly,the charter capital of foreign joint-venture banks increased by 2.76 percent to116.62 trillion VND (5 billion USD), compared with the 0.75 percent growthrate of State-owned commercial banks and 0.61 percent of Vietnamesecommercial banks.
Bankingexpert Nguyen Tri Hieu forecast a continually rising foreign capital inflow tothe country’s finance and banking market as many foreign investorsshow their interest in Vietnamese banks and financial companies.
“TheVietnamese market, especially consumer finance, has high growth potential,given the country’s population of nearly 100 million with only 30 percent ofthem having access to banking services, Hieu told Vietnam News.
Hieusaid foreign investors also expected to seize opportunities presentedby new-generation free trade agreements such as the Comprehensive andProgressive Agreement for Trans Pacific Partnership (CPTPP) and the EU-VietnamFree Trade Agreement (EVFTA), which Vietnam has just signed.
The increasein the activity of foreign banks will make competition pressure on the monetarymarket fiercer, Hieu said, adding Vietnamese banks need to operate on alarger scale with huge investments in technology and products throughconsolidations and mergers to create stronger institutions that are able tocompete with foreign banks.
However,the presence of foreign investors will also bring many opportunities for thedomestic monetary market and consumers will be the beneficiaries, he said.
TheVietnamese currency market has nine foreign-owned banks including ANZ, HSBC,Standard Chartered, Shinhan Bank, Hong Leong Bank, CIMB Bank, Public BankBerhad, Wooribank and United Overseas Bank Limited. There are also about 50foreign bank branches, more than 50 representative offices of foreign creditinstitutions and many foreign-owned finance companies.-VNS/VNA
This weekalone, the State Bank of Vietnam (SBV) announced it had approved capitalincreases for the Public Bank Vietnam Limited and Shinhan Bank Vietnam, a movethat paves the way for the foreign banks to expand their operations in Vietnam.
Malaysia’sPublic Bank Vietnam Ltd July 9 received the SBV’s permission to increaseits charter capital from 3.65 trillion VND (156.65 million USD) to 6 trillionVND (257.85 million USD).
A dayearlier, the SBV issued Document No 5096/NHNN-TTGSNH to allow the Republic ofKorea’s Shinhan Bank Vietnam to increase its charter capital from 4.55 trillionVND (193.4 million USD) to 5.71 trillion VND (245.4 million USD).
Besidesthe capital hikes, some foreign banks have also asked the SBV to extend theiroperation licences in Vietnam. On July 8, Japan’s Sumitomo Mitsui BankingCorporation in HCM City got the SBV’s permission to extend their tenure for anadditional 99 years.
Foreignbanks are also promoting their in-depth development in the Vietnamese market.Among them, the Woori Bank Vietnam Limited late last month received approvalfrom the SBV’s Governor to add stock depository services to its licence.
But themost notable moves by foreign investors have been in retail banking,especially consumer finance, which was previously considered a pointof strength for domestic credit institutions.
On July2, Shinhan Card, the leading credit card issuer in the RoK, opened the ShinhanVietnam Finance Limited Company (Shinhan Finance) in HCM City. It is a 100percent foreign-owned consumer finance firm.
A fewdays earlier, on June 25, the LOTTE Finance Company (LOTTE Finance) alsoofficially launched in the Vietnamese market after six months of doing business.
Risinginflow
The SBV’sstatistics showed that the growth rate of equity capital and charter capital offoreign joint-venture banks was always two to three times higher than that ofboth State-owned and private Vietnamese commercial banks.
As of theend of April, the equity capital of foreign joint venture banks had increasedby 8.7 percent to more than 177 trillion VND (7.6 billion USD), while thegrowth rate of State-owned commercial banks was 5.06 percent and of privateVietnamese commercial banks was 4.18 percent.
Similarly,the charter capital of foreign joint-venture banks increased by 2.76 percent to116.62 trillion VND (5 billion USD), compared with the 0.75 percent growthrate of State-owned commercial banks and 0.61 percent of Vietnamesecommercial banks.
Bankingexpert Nguyen Tri Hieu forecast a continually rising foreign capital inflow tothe country’s finance and banking market as many foreign investorsshow their interest in Vietnamese banks and financial companies.
“TheVietnamese market, especially consumer finance, has high growth potential,given the country’s population of nearly 100 million with only 30 percent ofthem having access to banking services, Hieu told Vietnam News.
Hieusaid foreign investors also expected to seize opportunities presentedby new-generation free trade agreements such as the Comprehensive andProgressive Agreement for Trans Pacific Partnership (CPTPP) and the EU-VietnamFree Trade Agreement (EVFTA), which Vietnam has just signed.
The increasein the activity of foreign banks will make competition pressure on the monetarymarket fiercer, Hieu said, adding Vietnamese banks need to operate on alarger scale with huge investments in technology and products throughconsolidations and mergers to create stronger institutions that are able tocompete with foreign banks.
However,the presence of foreign investors will also bring many opportunities for thedomestic monetary market and consumers will be the beneficiaries, he said.
TheVietnamese currency market has nine foreign-owned banks including ANZ, HSBC,Standard Chartered, Shinhan Bank, Hong Leong Bank, CIMB Bank, Public BankBerhad, Wooribank and United Overseas Bank Limited. There are also about 50foreign bank branches, more than 50 representative offices of foreign creditinstitutions and many foreign-owned finance companies.-VNS/VNA
VNA
