VietNamNet Bridge - Many commercial banks intend to open more branches and transaction points overseas, or allocate more capital to their overseas branches.

More banks intend to open branches overseas

Scaling up businesses overseas is a strategy pursued by Vietnam’s large banks to seek new business opportunities.

In September 2011, VietinBank opened a branch in Frankfurt, Germany. Just months later, it opened another branch in Berlin.

However, Laos and Cambodia are the favorite markets that Vietnam banks target. Nearly all large banks have branches or representative offices in the countries. 

In late 2010, Military Bank opened a branch in Laos, and then in Cambodia. The move was followed by BIDV, Sacombank, SHB and Agribank.

Myanmar is also an attractive market to Vietnamese bankers as the country is a fast growing economy. 

According to the Foreign Investment Agency (FIA), in the first three months of 2018, Vietnamese businesses pledged $149 million worth of outward investments. Of this, $105 million, or 70 percent, was from banks.

Sixteen countries and territories have received FDI from Vietnam. Laos and Cambodia are the biggest recipients with 53 percent and 17 percent, respectively, of Vietnam’s total outward investments.

Vietcombank, one of the ‘big four’ in Vietnam, has been slower than other banks in accessing Lao market. Vietcombank Laos with charter capital of $80 million presented itself before the public recently.

Pham Manh Thang, chair of Vietcombank Laos, said the market has been developing very rapidly recently. After seven years, it has a capital market and a stock market taking shape.

Moreover, Laos, with great resources in minerals, hydraulic power, agriculture and forestry, and an abundant labor force, is considered a gateway for investors to penetrate the market of 150 million people in the Mekong sub-region. The demand for capital is huge.

That is why exploiting the Lao market is the choice of many Vietnam’s banks. 

The Vietcombank overseas network also comprises a representative office in Singapore and two subsidiaries, including a finance company in Hong Kong and a money remittance firm in the US.

Vietcombank always sets ambitious business plans. It has vowed to be among thevtop 100 largest banks in the region and top 300 in the world in the near future. Expanding business overseas is a part of the action plan to obtain these goals.

Thang revealed that a Vietcombank branch will open in Australia and a representative office in the US.

Can Van Luc, a banking expert, said in the context of global integration, Vietnam’s businesses tend to seek investment opportunities around the world.

They need to be ‘escorted’ by commercial banks, which provide capital and services to help their business plans.

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