Hanoi (VNS/VNA) - The group of State-owned banks has continued tomaintain their leading position in terms of network coverage in the country’sbanking industry.

According to banks’ financial reports, State-owned Agribank has topped the listof network coverage with 939 branches nationwide by the end of last year. Itwas followed by three other State-owned banks: BIDV with 189 branches,Vietinbank with 155 branches, and Vietcombank with 121 branches.

In the group of private banks, Sacombank has led with 109 branches while MB andLienVietPostBank have come second and third with 99 and 76 branches,respectively. Sacombank has gained the position after it merged with SouthernBank which had more than 160 branches and transaction offices.

In terms of growth in network coverage, TP Bank gained the highest growth rateof 35.9 percent last year. The bank had 53 branches by the end of last year, up14 branches against the end of 2020.

Other banks, which last year opened an additional one to five branches againstthe end of 2020, are Vietcombank and HDBank (five branches); VPBank (fourbranches); Viet Capital Bank (three branches); OCB (two branches); Bac A Bankand Nam A Bank (one branch each).

According to current regulations, besides earning profits, complying with thecentral bank's regulations on operational safety, and having non-performingloans of fewer than 3 percent of total outstanding loans, the minimum capitalrequirement for opening a new branch and transaction office in Hanoi and Ho ChiMinh City is 300 billion VND (13.3 million USD), and 50 billion VND in othercities and provinces.

Previously, banks had often tried to enlarge their network of branches andtransaction offices rapidly in an effort to increase brand coverage and marketshare. However, they then saw the rampant opening of new branches andtransaction offices was ineffective. It was reported operating costs of banksincreased significantly due to the enlargement while the effectiveness of manynew transaction offices, especially in rural areas, was often not as expected.

According to Do Thai Binh, head of VIB’s Corporate and Institution BankingDivision, many banks realised the enlargement has been ineffective and they,therefore, have decided to focus on digital banking instead of opening morebranches and transaction offices in recent years.

The digital transformation for banks is now a must. Currently, the ratio ofcustomers who open online bank accounts, is increasing rapidly and the rate iseven a majority at some banks. Many banks have been also using electronic KnowYour Customer (eKYC) and the app has almost replaced a bank branch, accordingto Binh./.