return icon Vietnamnet.vn

Foreign finance institutions step up expansion plans in Vietnam

The competition in the Vietnamese finance and banking market has become fiercer as existing foreign institutions are rushing to increase capital even as new entrants continually join the market.

 

{keywords}
 

 


This week alone, the State Bank of Vietnam (SBV) announced it had approved capital increases for the Public Bank Vietnam Limited and Shinhan Bank Vietnam, a move that paves the way for the foreign banks to expand their operations in Vietnam.

Malaysia’s Public Bank Vietnam Ltd July 9 received the SBV’s permission to increase its charter capital from 3.65 trillion VND (156.65 million USD) to 6 trillion VND (257.85 million USD).

A day earlier, the SBV issued Document No 5096/NHNN-TTGSNH to allow the Republic of Korea’s Shinhan Bank Vietnam to increase its charter capital from 4.55 trillion VND (193.4 million USD) to 5.71 trillion VND (245.4 million USD).

Besides the capital hikes, some foreign banks have also asked the SBV to extend their operation licences in Vietnam. On July 8, Japan’s Sumitomo Mitsui Banking Corporation in HCM City got the SBV’s permission to extend their tenure for an additional 99 years.

Foreign banks are also promoting their in-depth development in the Vietnamese market. Among them, the Woori Bank Vietnam Limited late last month received approval from the SBV’s Governor to add stock depository services to its licence.

But the most notable moves by foreign investors have been in retail banking, especially consumer finance, which was previously considered a point of strength for domestic credit institutions.

On July 2, Shinhan Card, the leading credit card issuer in the RoK, opened the Shinhan Vietnam Finance Limited Company (Shinhan Finance) in HCM City. It is a 100 percent foreign-owned consumer finance firm.

A few days earlier, on June 25, the LOTTE Finance Company (LOTTE Finance) also officially launched in the Vietnamese market after six months of doing business.

Rising inflow

The SBV’s statistics showed that the growth rate of equity capital and charter capital of foreign joint-venture banks was always two to three times higher than that of both State-owned and private Vietnamese commercial banks.

As of the end of April, the equity capital of foreign joint venture banks had increased by 8.7 percent to more than 177 trillion VND (7.6 billion USD), while the growth rate of State-owned commercial banks was 5.06 percent and of private Vietnamese commercial banks was 4.18 percent.

Similarly, the charter capital of foreign joint-venture banks increased by 2.76 percent to 116.62 trillion VND (5 billion USD), compared with the 0.75 percent growth rate of State-owned commercial banks and 0.61 percent of Vietnamese commercial banks.

Banking expert Nguyen Tri Hieu forecast a continually rising foreign capital inflow to the country’s finance and banking market as many foreign investors show their interest in Vietnamese banks and financial companies.

“The Vietnamese market, especially consumer finance, has high growth potential, given the country’s population of nearly 100 million with only 30 percent of them having access to banking services, Hieu told Vietnam News.

Hieu said foreign investors also expected to seize opportunities presented by new-generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), which Vietnam has just signed.

The increase in the activity of foreign banks will make competition pressure on the monetary market fiercer, Hieu said, adding Vietnamese banks need to operate on a larger scale with huge investments in technology and products through consolidations and mergers to create stronger institutions that are able to compete with foreign banks.

However, the presence of foreign investors will also bring many opportunities for the domestic monetary market and consumers will be the beneficiaries, he said.

The Vietnamese currency market has nine foreign-owned banks including ANZ, HSBC, Standard Chartered, Shinhan Bank, Hong Leong Bank, CIMB Bank, Public Bank Berhad, Wooribank and United Overseas Bank Limited. There are also about 50 foreign bank branches, more than 50 representative offices of foreign credit institutions and many foreign-owned finance companies.VNA

MORE NEWS

Foreign e-commerce platforms must set up an office or appoint representative in Vietnam

Foreign traders and foreign organizations having e-commerce activities in Vietnam must establish representative offices or appoint representatives according to Vietnam’s regulations.

Coal reserves running out, VN to import coal to generate electricity

Domestic coal production is mainly used for electricity production. In 2019, domestic coal for power generation accounted for 76% of total coal output.

Banks unveil ambitious charter capital hike plans

Banks have faced pressure to increase their charter capital over the past few years to enhance their financial capacity and improve safety indicators to get closer to international standards.

Can businesses still make money from stock trading?

Financial reports in the first quarter of the year highlighted that many enterprises earned profits from financial investment activities but the profits plunged over the same period last year and their investment portfolios were narrower.

“Hell” rice that tastes like heaven

Among the specialties of the ancient city of Hue, Com am phu, or “Hell” rice, stands out with its combination of white rice, pork, shrimp, egg and herbs, culminating in a flavorsome experience.

SOE equitization: investors target ‘golden land’ owned by enterprises

Some state-owned enterprises (SOEs), after equitization, have changed their production and business models to exploit advantages in land, thus ‘killing’ their core businesses.

GameFi has potential to attract billions of dollars worth of foreign capital

To help promote development of Vietnam’s startups, Blockchain-based game projects can also help attract foreign capital, another source for tax collection.

VIETNAM NEWS HEADLINES MAY 22

15th National Assembly to commence third session on May 23

VIETNAM BUSINESS NEWS MAY 22

AMRO forecasts Vietnam’s strong recovery amidst external headwinds

Vietnam unveils national costume for Miss International Queen 2022

Vietnamese representative Phung Truong Tran Dai officially unveiled an outfit that she will wear during the National Costume Competition at the Miss International Queen 2022 pageant set to take place in June in Thailand.

Exploring the unspoiled beauty of Du Gia

The striking beauty, peaceful nature and fresh air of Du Gia Village in Ha Giang Province never ceases to enchant travelers.

Vietnamese stocks see world-leading growth

The surge of several leading stocks is deemed as a driving force for Vietnam's stock market achieving the world's strongest gains.

Lam Kinh ancient royal capital holds feudal mysteries

The special national relic site of the Lam Kinh ancient royal capital of the Later Le Dynasty in Thanh Hoa's Tho Xuan District harbours mysterious tales about one of the most significant Vietnamese feudal reigns.

Artist goes bananas with rustic artworks

Dried banana bark might sound useless to many, but by using his creativity and skill, artist Phan Van Dac in Quang Binh Province creates vivid landscapes and soulful portraits.

Vietnam Airlines posts VND2.6-trillion net loss in Q1

Vietnam Airlines reported a net loss of over VND2.6 trillion in the first quarter of 2022, sending the national flag carrier’s accumulated loss up to VND24.5 trillion, or over US$1 billion.
back_to_top