Banks should compete relying on their unique strength


Not only should the State Bank of Vietnam maximize its flexible and effective monetary policy, but commercial banks also need to actively improve their internal strength and gain their own competitive advantages to be on the same footing with regional rivals. This is one of the key messages passed on during the Banking Panorama Forum 2019 jointly hosted by the Saigon Times Group and the central bank in Hanoi on May 8.

Participants in the forum agreed with one another on the key role of the State Bank of Vietnam (SBV), the central bank, in maintaining a flexible monetary policy to ensure the financial market’s stability in 2019, the year in which negative impacts on the Vietnamese economy are projected given global market fluctuations.

Citing this positive point, Can Van Luc, a banking expert, contended that two bright spots in the banking system can be found. The central bank has been faithful to its relatively stable foreign exchange policy during the past three years and foreign reserves have increased remarkably, which partly enhances the credibility in the domestic currency and its convertibility in the future.

According to Nguyen Tu Anh, deputy head of the Monetary Policy Department of the SBV, in early this year, a host of arising challenges may impact the Vietnamese economy, such as the global economy slowing down, Sino-American trade tension, EU-U.S. trade dispute and a possible comeback of trade protectionism. These adverse effects have prompted investors to flee from emerging economies, especially those with unstable macroeconomic situation. In such a context, however, international credit rating institutions have raised Vietnam’s credit rating.

That is because, said Anh, the central bank has been active in its regulation of the banking system by revising up the central rate to expand the margin with which the market can move up or down. Since last July, when the market began to fluctuate considerably, the SBV has had to do two jobs at a time. While closely monitoring the market, the central bank has to opportunely adjust their tools. This indicates that the central bank has been fully aware of risks and ready to interfere by creating shocks with its tools. In this regard, the SBV has pacified market sentiment by satisfying adequately market demand for legitimate foreign currencies, which also means that the central bank can be proactive and capable of coming up with countermeasures.

Vo Tri Thanh, former vice director of the Central Institute for Economic Management (CIEM), said last year the central bank was tactful about both meeting liquidity demand and keeping interest rates stable on the Interbank market. Although there were times in which the Interbank rate was high to maintain the foreign exchange rate, they did not seriously impact bank interest rates, in particular, lending rates. This is arguably a success attained by the SBV that has responded to the market with appropriate reactions.

Thanh added that the SBV has been implementing its three basic duties since 2012. They include the regulation of the stable monetary policy; bad debt management—which has become better due to Resolution 42; and the restructuring of the banking system on the way to compliance with the Basel II Accord.

However, Thanh argued that there remain three big issues which require the SBV’s attention so as to effectively support the healthy development of the financial system.

First, the current monetary policy includes way too many intermediate goals. “The total money supply, M2, and credit are managed in quantity and, at the same time, attached to interest rates,” he said. “Foreign exchange, despite being more flexible, is still to a certain extent a policy tool.”

According to Thanh, the central bank should be prepared for the medium-term future, that is switching to inflation targeting at all costs, possibly inflation targeting which is adjustable. The financial system must then be managed in accordance with prices, and the intermediate target must be prices, or in other words, interest rates. This is a formidable challenge for the central bank and should be adequately addressed.

Secondly, Vietnam’s economic openness is ever greater and hence in the next 10 years Vietnam dong should be relatively convertible. This was a goal set 20 years ago, which failed to materialize. The failure has partly curbed new capital inflow considering the fact that recently portfolio investment and capital via merger and acquisition have expanded considerably in the country’s profile of foreign investment. In fact, foreign investment attraction is no longer simply foreign direct investment pooled into factories.

The third issue in which Vietnam is still lagging behind, said Thanh, relates to the development of Fintech and the digital economy whose component is non-cash payments. As risky as it may be, Fintech is a tool for fighting loan sharks, ensuring Vietnam’s commitments to total financial implementation, and guaranteeing universal financial services at reasonable fees. 

Banks should gain their own competitive advantages

Pham Hong Hai, CEO of HSBC Vietnam, argued that the country’s banks are fortunate because they are in a market with great growth potential. Hai’s argument is evidenced by the fact that a long lineup of foreign banks is waiting for a chance to enter the Vietnamese market although already present here are more than 100 banks.

Currently, only a few banks in Vietnam have the appropriate scale or feasible strategy for reaching the regional status. Local banks are facing difficulty in positioning and setting development strategies. The majority of them have development models similar in one way or another and compete with one another relying on prices, not on making a difference.

Hai further explained what he said by telling the story of HSBC. According to Hai, HSBC used to develop both retail and business banking in every country it set foot in. However, it is history now. HSBC has come to realize that in some countries, the bank could not compete successfully because it failed to maximize its global system there. HSBC has thus sold out certain arms to focus on areas it is really competitive by maximizing the strength of its global system and serving customers with a need to use its global system.

“Finding one’s own competitive advantages is the question posed to every Vietnamese bank,” said Hai. “Each bank should find out its own strength and formulate strategies relying on that strength.”

Furthermore, Hai maintained that each bank should tackle the following issues to be able to consolidate its internal strength and develop in the future. First, it needs financial transparency, from branches to the headquarters. Secondly, every conflict between the bank’s owners and the management must be handled. If bank owners want to use capital from their bank to extend loans to their companies, it is really tough for the bank in question to develop. Finally, more diverse products and services must be added to those currently available. Otherwise, the bank will find it hard to expand, said Hai.

“Notably, banks should place emphasis on the digitalization of their services and building training plans so that their staff can be kept updated to new trends and avoid being sidelined during the digitalization process,” he said. “That is also a great challenge for banks whose networks are so extensive and staff number in the thousands.”

Sharing Hai’s view, Nguyen Thi Hoa, vice director of the Banking Strategy Institute under the SBV, said banks should embrace a swift change from the “credit-only” business model to product diversification and non-credit banking services. Banks should also improve their professionalism in providing e-banking products and services, and export of financial services, among others, Hoa said.

Export of aquatic products forecast to grow 8 percent in Q2


Exports of aquatic products in the second quarter could increase by 8 percent at the highest, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The association said the increase could be achieved if shipments of seafood such as sea fish, tuna and octopus post strong growth and those of Tra fish are kept stable.

Aquatic product exports in the first quarter of this year showed a slowdown with an increase of only 1 percent to 1.8 billion USD, due to the downward trend in shrimp export that has persisted since last year. Shrimp shipments in the January-March period dropped by 17 percent amidst falling prices, high stockpiles in overseas markets and fierce competition in the world market.

Tra fish exports also posted a lower growth in the first quarter this year, at 8 percent, compared to 37 percent in the previous quarter. However, exports of several kinds of seafood rose strongly, such as tuna (19 percent), squid and octopus (12 percent) and other fish (22 percent).

On terms of markets for Vietnamese seafood, the US dropped to the third place after Japan and the US due to reductions in its import of shrimp and Tra fish. High anti-dumping tariffs and competition pressure will continue to affect Vietnam’s export of shrim and Tra fish to this market in the months ahead.

However, VASEP hopes that the upcoming two seafood fairs in the US and Europe will help import demands in those two markets pick up.

Vietnamese, Dutch firms cooperate in high-quality breeding pig project

The De Heus group of the Netherlands and Hung Nhon Group operating in the southern province of Binh Phuoc have set up a joint venture to invest in a 1.5-trillion VND (64.1 million USD) high-tech pig breeding project in the Central Highlands province of Dak Lak.

According to General Director of Hung Nhon Group Vu Manh Hung, the two firms recognized the importance of establishing a disease-free area for the livestock industry in Vietnam, and the project is expected to meet the increasing demand for pigs in the next two years, as the African swine fever is affecting many localities including Binh Phuoc.

This is the good chance for them to produce the best breeding pigs for Vietnamese farmers, he added.

Covering an area of about 200 ha, the project includes a 80-ha farm to raise about 2,400 breeding pigs imported from the Netherlands, along with a feed processing plant, slaughter houses, fertilizer production areas, and poultry farms.

Hung Nhon Group has developed from a chicken farm during more than a decade. It now boasts a closed livestock chain using high technology for production, with 20 farms supplying 3 million chickens a year and eight egg-laying chicken farms providing 130 million eggs a year. It also has 48 pig farms supplying 9,600 breeding sows and 250,000 piglets a year.

Facilitating capital sources for development investment


The outstanding credit of the banking system was equal to 130% of the GDP by the end of 2018, while market capitalisation was only equivalent to 71.6% of the GDP and the total value of listed bonds reached VND1.1 quadrillion (US$47.3 billion), equivalent to 20.3% of the GDP. The imbalance between the monetary market and the capital market continues to put pressure on the banking system.

Medium and long-term credit accounts for 50.6%

Vice Chairman of the State Securities Commission (SSC) Pham Hong Son, said that Vietnam’s stock market was established in 2000 but it has seen rapid and relatively sustainable strides at an average growth rate of 25% peryear.

The value of market capitalisation accounted for 52.5% of the GDP in 2010 and the size of the capital market soared to 111% of the GDP in 2018 with more than 1,000 listed companies.

However, the imbalance between the banking capital supply channel and the capital market is still very large. Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu said that enterprises have high demand formedium and long-term capital to expand and develop production and business activities, but the capital market has yet to develop fully in both size and quality to meetthe need of enterprises. Therefore, medium and long-term capital for the economy still relies heavily on the banking system, which accounts for about 50.6% of the total outstanding loans.

"To meet the needs of medium and long-term capital of enterprises and the economy at large, stock market development is an indispensable condition to gradually reduce dependence on banking credit," Tu emphasised.

The Ministry of Finance said that that the stock market reached 71.9% of the GDP and the bond market reached more than 39% of the GDP by the end of 2018. Of which,Government bonds account for almost all transactions with a scale of over 27% of the GDP, while corporate bonds only reached 8.6% of the GDP and increased to roughly 9.2% in the first quarter of 2019.

In the meantime, the insurance market maintains an average growth rate of about 25% per year and reached over 3% of the GDP by the end of 2018. Insurance companies have invested more than VND300 trillion(US$12.9 billion) into the economy.

In fact, several financial services and products have yet to attract investors. Corporate bonds are available but people do not know and do not invest in them, while the project on the voluntary pension fund, which was approved by the Government in 2016, has not been established.

Credit rating culture should be shaped

The shift of resources from the monetary market to the capital market is an inevitable trend in order to meet thedevelopment demand of the economy. Economic experts believe that there should be specific policies to attract idle money from the people into the corporate bond market and voluntary pension funds instead of sending money into savings accounts in the banking system.

In addition, 79% of the bank's total assets are deposits of organisations. If there is a solution to switch this capital flow into medium and long-term deposits, it will facilitatecapital for development investment.

General Secretary of the Vietnam Bond Market Association Do Ngoc Quynh said that it is impossible to expect the increase of the market size by asking all enterprises to issue bonds. Experience from countries with developed financial markets show that only companies that have developed to a certain level should issue bonds. Newly established and growing enterprises can mobilisecapital through funds.

"Malaysia has 70% of its GDP as corporate bonds but only about 30 large enterprises issue bonds, while small and medium-sized enterprises do not participate in issuing bonds", Quynh cited.

It is necessary for Vietnam to form a credit ranking culture to boost the transparency of information and stimulate professional and capable investors to participate in the market.

The Ministry of Finance issued regulations on credit ratings in 2016 and there were companies licensed to operate in this field, but credit ratings in Vietnam are yet to develop. In addition, there should have coordinationbetween ministries and a monthly working plan to promptly solve arising problems in a bid to develop the corporate bond market.

Regarding voluntary retirement products, the Ministry of Finance said there are two products including insuranceand voluntary pension funds with the aim of promotingsocial development and capital generation for enterprises.

There are six enterprises providing pension insurance products in Vietnam with total assets of VND2.6 trillion (US$115.11 million). But only one enterprise registered to operate in the area of voluntary pension funds and is being considered by the Ministry of Finance.

The fund has not been implemented as expected because it can only be formed when businesses have policies for workers and people have certain financial resources. Many countries need from 30 to 50 years to form thefund, thus, Vietnam needs to have appropriate mechanisms and policies in addition to the support from both businesses and people in order to establish the fund.

Andy Ho, Managing Director and Chief Investment Officer of VinaCapital emphasised that the fund is one of the most effective capital channels for the economy, proposing tax reduction for individuals and organisationsparticipating in the fund, while increasing the dissemination of information on this area to help people understand the safety and benefits of investing in the fund.

Money laundering more likely in banking, realty sectors

The banking and real estate sectors are where money can be easily laundered by those involved in criminal activities, according to a report released by the State Bank of Vietnam (SBV) at a teleconference in Hanoi on Friday.

The central bank said in the report on the national risk assessment on money laundering and terrorism financing for 2012-2017 that the local banking sector plays a vital role in the financial system and the economy. Its total assets rose from VND4,993.9 trillion in 2011, equivalent to 180% of the country’s gross domestic product (GDP), to VND8,503.5 trillion, or 190% of GDP in 2016.

With its extensive network and role as a financial intermediary providing a variety of financial products and services, such as lending, deposits, finance leasing, foreign currency trading, and monetary market instruments, the overall vulnerability of the sector to money laundering is rated as medium.

Pham Gia Bao, deputy head of the SBV’s Anti-Money Laundering Department (AMLD), cited the report as saying that the banking sector accounted for nearly 90% of all suspicious transactions reported to the department, higher than any other sector.

The report noted that not all of the illegal proceeds from criminal activities are laundered. However, from the much higher suspicious transaction reports (STRs) in the banking sector, it might be implied that money launderers prefer the banking system to legalize their illegal proceeds, or clean “dirty money”, than other options.

From the high value of recent cases being investigated for money laundering, and statistics on STRs received by the AMLD, it can be assumed that money laundering threats in the sector mainly originate from financing offences, including embezzling property, gambling, and tax evasion.

In order to conceal the proceeds, criminals often use individual’s bank accounts to receive and transfer illegal funds.

Meanwhile, according to the report, the local real estate sector is among the channels that can be exploited easily by money launderers since, compared to other markets, the investment in real estate is relatively favorable and does not require many binding procedures to enter.

The real estate sector attracts high sources of investment, while the related transactions and remittances can be done directly in cash or through banking remittance systems, instead of trading floors. This makes it difficult for authorities to check and verify the sources of money.

Among recent high-value cases of embezzling property and gambling, their proceeds are mainly confiscated from the realty sector. To launder money, criminals often buy real estate properties in the names of family members and transfer the real estate as gifts.

Bao, of the central bank, pointed out the case of asset embezzlement masterminded by Giang Kim Dat, age 39, former acting head of the sales department at the State-owned Vinashin Ocean Shipping Co., Ltd. (Vinashinlines), who was given the death sentence.

Dat appropriated roughly VND260 billion worth of Vinashinlines’ bonuses from the purchase of a vessel and lease contracts. He transferred this sum to 22 accounts owned by his father to buy 40 properties and 13 cars.


Thus far, Vietnam has not investigated or prosecuted any money laundering cases originating from the abuse of trust to appropriate property.

The report also assessed the risks of money laundering in securities, foreign exchange and casino sectors, which were marked at average levels, while the risks in other sectors, such as auditing, accounting and law, were low.

The SBV’s Deputy Governor, Nguyen Kim Anh, said at the teleconference that the banking sector had devised nearly 40 action plans on its own, and 20 others in coordination with ministries and agencies between 2012 and 2017.

For the sake of their effective implementation, the central bank had asked credit institutions, foreign exchange shops and payment intermediaries to adopt these plans.

Also, he added another action plan to address the risks of money laundering and terrorist financing in the 2019-2020 period, which was recently approved by Deputy Prime Minister Vuong Dinh Hue.

The plan has five areas of action, including measures related to the legal framework; measures on powers and responsibilities of the competent authorities; domestic cooperation; inclusive financial products; and international cooperation.

Real Estate Forum 2019 held in Hanoi

In 2019, in the context of abundant capital, rising numbers of domestic and foreign investors, and good growth prospects in the residential market, only reputable investors deploying quality projects will gain market share, the Real Estate Forum 2019 with the theme “Real Estate Investment Trends in 2019” held on May 16 in Hanoi heard.

Mr. Hoang Quang Phong, Deputy Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said that investment opportunities in the real estate sector are booming, so in 2020 investors and real estate developers also need to be careful of the risks that may be encountered, especially the risk of climate change, rapid behavioral change, and political risk. “In the context of fierce competition, developers need to know more about segments and have a more global perspective to determine the direction of investment,” he added.

Mr. Matthew Powell, Director of Savills Hanoi, said that real estate is generally the biggest asset reserve channel with a value 3.5-times the total global GDP.

According to Savills’ figures, the total real estate value worldwide as at the end of 2017 stood at $280.6 trillion, with about 78 per cent of value coming from residential real estate. Meanwhile, the total value of all the gold in the world was only about $7.7 trillion and total global GDP was about $78.3 trillion, or 30 per cent of the value of real estate.

“Stocks and gold increased faster than real estate, but the development of emerging economies was synonymous with increased capital value, and real estate was considered a safe capital investment channel,” Mr. Powell noted.

Mr. Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association (VnREA), believes that the greatest advantage for Vietnam’s real estate market is the huge demand and liquidity. “Our market will be very healthy, as urbanization will remain commonplace in the medium and long terms,” he added. “According to calculations, an average of 1 million people a year move from rural areas to urban areas and people like to save money to buy houses. This is a huge opportunity for the market.”

From a State management perspective, Mr. Nguyen Manh Khoi, Deputy Director of the Housing and Real Estate Market Management Agency at the Ministry of Construction (MoC), said that mechanisms relating to real estate all stem from the practical situation, including forecasts. “State agencies have been more aggressive in managing real estate investments, so businesses have worked effectively,” he said. “Supply is also more diverse compared to 2017 and 2018, when only high-end real estate was the focus of investment, leading to fears of a real estate bubble emerging.”

VPBank partners with VinaCapital to provide investment options

The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) and VinaCapital Fund Management (VCFM), a member of the VinaCapital Group, one of Vietnam’s leading investment and asset management firms, recently signed a strategic partnership agreement in which the two will work closely to offer VPBank’s individual customers a range of new and diverse investment products.

VCFM will introduce to priority customers of VPBank a new form of investment through open-ended fund shares, which are favored by domestic and international investors alike due to their high levels of safety and liquidity.

VCFM currently offers three open-ended funds: VEOF (VinaWealth Equity Opportunity Fund), which invests in listed stocks, VFF (VinaWealth Enhanced Fixed Income Fund), which invests in bonds, and VIBF (VinaCapital Insights Balanced Fund), which invests in a mix of stocks and bonds. Each of these funds offers a different level of risk and potential return to meet differing investor needs.

VPBank and VCFM have also agreed to jointly develop specialized seminars, sales days, and meetings to introduce VCFM’s financial products to the bank’s customers. VCFM’s financial experts will analyze and advise on investment planning strategies for each group of VPBank’s customers, helping to ensure they have sufficient information to make wise investment decisions, as well as establish an ongoing relationship with them to keep them updated on market trends - whether positive or negative - to help minimize risks and maximize returns.

“We are very pleased to work with VPBank to offer their customers expanded personal investment opportunities and advice,” said Ms. Nguyen Thi Thai Thuan, General Director of VCFM. “Investment products can play an important role in a diversified personal finance plan. We continually strive to create new products that both meet the needs of consumers and capitalize on positive market trends, and look forward to offering these products to VPBank’s customers.”

Mr. Phung Duy Khuong, Deputy General Director of VPBank, said that individual Vietnamese investors are gradually discovering the benefits of investing in open-ended funds. “VinaCapital has been at the forefront of offering new investments to the retail market, and we are delighted to work with them to offer our customers a larger range of investment solutions as we continue to aim to become the best retail bank in Vietnam,” he said.

The bank last month also signed a cooperative agreement with local technology startup Haravan, called “Empower 50,000 Vietnamese enterprises”, with the participation of over 100 e-commerce and retail businesses, in order to improve digital transformation capacity and accompany the development of local enterprises, especially small and medium-sized enterprises (SMEs).

Viettel applies AI in agriculture and health

Viettel is applying artificial intelligence (AI) to resolve problems in the fields of health and agriculture.

For the first time in Vietnam, AI image processing technologies are being used to assist farmers assess the level of development of rice. Viettel’s solution is able to monitor crops on a large scale and creates the foundation for higher productivity.

In the field of health, its solution for analyzing and diagnosing abnormal signs through ultrasound images is being completed in the laboratory, with diagnostic solutions through imagery supporting doctors and patients 24/7. Viettel is now focusing on the analysis of abnormal signs in the digestive system - a prominent field in Vietnam lacking foreign solutions.

In addition to agriculture and health, the corporation is also implementing AI in the fields of forestry and transport.

The application of AI to address social challenges is an important piece of Viettel’s digital strategy, with products serving individuals, businesses, and the State.

Viettel has established member companies such as Viettel Enterprise Solutions and Viettel Cyber Security since the beginning of this year. Its Digital Corporation will be established in the time to come to bring digital products and services to life.

Viettel is a Vietnamese corporation deploying telecommunications and IT in all areas of life and has the broadest 4G infrastructure, the largest fiber optic infrastructure, NB-IoT system among the first 50 deployed in the world, and the first e-sim system in Vietnam.

It recently completed the integration of the first 5G network in Vietnam, around Hoan Kiem Lake in Hanoi, and successfully tested broadcasts on all bands licensed by the Ministry of Information and Communications (MoIC).

Viettel is on a Brand Finance list of the 500 most valuable brands in the world, with a valuation of $4.316 billion. Its brand value has risen 35.8 per cent, or more than $1 billion, since early 2018, primarily due to its presence in ten foreign markets, proving it has become a highly-competitive operation in the international market.

2018 was a successful year for the corporation in expanding its foreign investment in Asia. Mytel, the Viettel brand in Myanmar, reached nearly 5 million subscribers after just six months of official business, for a market share of more than 10 per cent. Service revenue increased 20 per cent during the year, mobile subscribers grew nearly 70 per cent, and cash flow back to Vietnam reached $240 million, up more than 3 per cent against 2017.

Viettel changed its name to the Military Industry and Telecoms Group last year and announced it would move to the fourth stage of its development, with the goals of globalization and leading the way in Industry 4.0.

Bamboo Capital sets targets for upcoming years

The Bamboo Capital JSC (BCG) has approved its plan for 2019, with a revenue target of over $128 million, up 2.6-fold against 2018, and profit of $13.3 million, 166 per cent higher than last year.

At its annual general meeting (AGM) held recently in Ho Chi Minh City, Chairman Mr. Nguyen Ho Nam also set revenue and profit targets for 2020, of nearly $241 million and $18.6 million, respectively, and $192.3 million and $38.7 million for 2021.

By 2020, the company’s revenue structure will change due to the completion of certain real estate developments and the collection of revenue from energy projects. Discussing the structure in the 2019-2021 period, Mr. Nam said that while revenue this year will come from real estate in central Quang Nam province and Ho Chi Minh City, revenue in 2020 would come mainly from solar power projects.

Regarding the dividend plan, the AGM approved an expected dividend for 2019 of 20 per cent, of which 10 per cent is in cash and 10 per cent in shares. The dividend for 2020 is expected to be 10 per cent in cash and 20 per cent in shares.

The Malibu Hoi An residential project in Quang Nam is to earn expected revenue of $130.5 million and additional revenue of $42.7 million this year, with hand over beginning in the third quarter. All condotels have been sold, as have two-thirds of villas.

The King Crown Village Thao Dien project in Ho Chi Minh City’s District 2 will see 17 villas handed over at the end of this year with revenue of $38.5 million. In the second phase, a 25-story complex will function as a five-star hotel and office building with total investment of over $64 million.

BCG is also implementing legal procedures for its Casa Marina project in Quy Nhon in south-central Binh Dinh province, including 160 villas, and for its 38-story PEGAS condominium project in south-central Nha Trang city.

In solar energy, BCG Bang Duong expects its Gaia project will be completed and generate electricity before June, with full operations by the end of the year.

BCG also continues to deploy solar projects - one in the Mekong Delta’s Long An province with a total capacity of 100 MW, one in the central highlands’ Dak Lak province with 50MW, and three in the Mekong Delta’s Ben Tre province with a capacity 500 MW, as well as a wind power project in the Mekong Delta’s Soc Trang province of 45 MW. BCG’s goal is to increase total capacity to 400 MW in 2019-2020 and 1,000 MW in 2023.

Mr. Nguyen The Tai, BCG’s Vice Chairman, said its agricultural subsidiary Nguyen Hoang Corp. would be listed by 2020. The subsidiary has set a revenue plan for 2019 of nearly $15 million with a gross manufacturing margin of 25 per cent.

Mr. Nam added that South Korea’s Hanwha Energy and BCG have drafted a cooperation contract, under which Hanwha plans to invest $4.3-$8.6 million in acquiring 10 per cent of BCG’s energy segment this year. The contract is expected to be signed in June.

SolarBK & Bach Khoa Uni partner to promote renewable energy

Bach Khoa Solar Energy Group (SolarBK) and Bach Khoa University (BKU) recently announced comprehensive cooperation in recruitment, training, scientific research, and technology transfer.

Solar Experience Space (SES), established in 2017 by SolarBK and BKU, and solar projects installed at Bach Khoa University have proved their efficiency and the development of Vietnam’s renewable energy industry. This first step in comprehensive cooperation comes as solar power has become more popular in Vietnam.

The government has strongly encouraged the development of renewable energy in recent years, considering its potential for the economy and the environment and in sustainable development. Training a young workforce is extremely important in making the solar power industry a key economic sector in Vietnam.

With a mission to promote Vietnam’s renewable energy around the world, the cooperation between SolarBK and BKU is a crucial step in generating a high-quality workforce with practical knowledge about the industry. BKU not only aims to become the leading school in electrical engineering and electronics but also to become a pioneer in practical training in renewable energy.

For example, SES is the first model in renewable energy, for passionate students to research and gain more knowledge about the industry. With 16.065 kWp capacity, the system cuts approximately 23 tons of CO2 each year and helped nearly 24,000 BKU students learn about renewable energy. The SES project overcame more than 41 others to be the only Vietnamese project to win The Smarter E Award 2018 - Outstanding Project category.

Based on equality and shared goals to develop renewable energy in Vietnam, the two parties have built cooperation categories.

Firstly, they will associate to research, develop, and deploy new technologies as well as share experience and expertise based on both sides’ needs. The agreement proposes forming an expert group to research scientific projects related to developing “Made in Vietnam” smart renewable energy, supporting technology transfer in the renewable energy field, and approving rooftop solar power system experiments under the ESCO model (Energy Service Company).

Secondly, they will support students - the future workforce - to access a practical working environment through internships and skills training, such as supporting them in visiting SolarBK’s construction projects and providing a renewable energy internship environment for students of related industries. The cooperation also organizes renewable energy training (with certification).

With a vision to form a descendant team, the cooperation means higher workplace proactivity and is a chance for SolarBK and BKU to develop more pragmatic research projects in order to upgrade the manufacturing process in and quality of “Made in Vietnam” products and promote solar energy to the broadest extent and make it closer to households. BKU is also the base from which SolarBK forms and develops.

Given that the government has continually encouraged renewable energy in general and solar energy in particular, Vietnam has to speed up producing more workers to satisfy potential demand. This cooperation therefore meets needs in the supply and demand of workers in Vietnam’s renewable energy sector.

Israeli companies seeking co-operation in Vietnamese fintech

Six leading Israeli fintech companies came to Vietnam to attend the “Fintech – accelerating digital transformation through AI & Automation Technologies” seminar, joining around 100 representatives from firms, banks, and insurance companies from Vietnam.

The seminar was held in Hanoi by the Embassy of Israel Vietnam in co-operation with Israel Export and International Cooperation Institute and the Israeli Ministry of Economy and Industry.

Addressing the seminar, Nadav Eshcar, Ambassador of Israel to Vietnam said that Israel’s fintech is now super powerful. “There are more than 500 fintech companies in Israel offering a variety of solutions which are extremely relevant to Vietnam, particularly to the financial sector. We carefully chose only six of them to invite to Vietnam this time,” said the ambassador. He also hoped that the businesses from both sides will find chances for co-operation and benefit from them.

Meanwhile, sharing with VIR, Yaniv Tessel, head of the Economic & Trade Office under the Embassy of Israel in Vietnam, said that Israeli fintech companies are leading the world in artificial intelligence, automation, data security, and cyber security. “These issues are very important to banks, so I believe there is a huge potential for Vietnam and Israel to co-operate in fintech,” he said.

As one of the forerunners of second-generation identified authentication and onboarding automation, AU10TIX has supplied technologies for many major global players such as PayPal, Google, Visa, BBVA (bank in Spain), and Payoneer. Coming to Vietnam for the first time, this company’s sales director Shay Cohen was deeply impressed. “I find Vietnam a market with potential, with smart people who are eager to learn and adopt technologies. Vietnam is an amazing market that is moving forward,” Shay told VIR.

Meanwhile, Oded mey Raz, director of Product Marketing and Sales, Kaymera, an Israeli supplier of secure communications and identity theft prevention for bank executives and private banking, said that Israel has many solutions related to innovative banking services that Vietnam needs. “We will present our technology solutions which can help improve banking access in a secure manner,” Oded said.

Sharing with VIR about the factors helping fintech to develop, Oded affirmed, “If regulations are too tough, we cannot introduce fintech, but we also need regulations to protect us. Strong regulations that are nevertheless open for innovative technology is the thing the fintech market needs.”

As one of the keynote speakers at the event, Nguyen Thanh Binh, discipline head of Finance at Royal Melbourne Institute of Technology, told VIR that the fintech market in Vietnam is currently at the early stage of development and will grow quickly in the coming years. “The main drivers for the rapid growth are the emergence of new technologies that facilitate payment, lending or borrowing and financial planning; a young tech-affine population which embraces new technologies; the focus of banks on digital banking; and governmental efforts to increase financial inclusion as well as to move to a cashless society.”

According to Solidiance, an APAC-focused consultancy firm, Vietnam’s fintech market was worth $4.4 billion in 2017 and is predicted to reach $7.8 billion by 2020, which equals a 77 per cent increase over three years.

Meanwhile, the strategy of developing Vietnam's banking industry to 2025 with a vision to 2030, has also named technology as the leading solution to the development of Vietnam's banking system. Vietnamese banks need to focus on developing products and services based on modern IT platforms and develop a conducive IT infrastructure, putting the emphasis on security.

They also need to encourage a healthy competitive relationship with other banks and fintech organisations. Meanwhile, the government should create an appropriate legal environment for the development of safe and efficient fintech organisations.

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