return icon Vietnamnet.vn

Vietnamese banks could be taken over by regional big banks

VietNamNet Bridge - When the ASEAN Economic Community takes effect, Vietnam will have to allow up to 70 percent of foreign ownership ratio in Vietnamese banks.
VietNamNet Bridge - When the ASEAN Economic Community takes effect, Vietnam will have to allow up to 70 percent of foreign ownership ratio in Vietnamese banks.

{keywords}
When the ASEAN Economic Community takes effect, Vietnam will have to allow up to 70 percent of foreign ownership ratio in Vietnamese banks.

This is the reason why experts have warned that Vietnamese banks may be taken over by regional big banks once the door to Vietnamese banks opens widely to them.

According to the State Bank of Vietnam (SBV), by the end of July 2015, Vietnam had five 100 percent foreign owned banks, four joint venture banks, 49 foreign bank branches and 51 representative offices.

The total assets of foreign and joint venture banks had reached VND715.250 trillion by that time, accounting for 11.01 percent of the total assets of the Vietnam banking system. The figure was very modest compared with total assets worth VND3,065,159 billion owned by state-owned banks and VND2,713,250 billion owned by joint stock banks.

However, the gap in chartered capital among the three groups of banks – foreign banks, state-owned banks and joint stock banks – is not big. The figures were 20.34 percent, 32.56 percent and 47.11 percent by July 2015.

If considering the ratio of chartered capital on total assets, foreign and joint venture banks have the highest ratio, 12.66 percent. Meanwhile, joint stock banks rank the second with 7.73 percent and state-owned banks 4.73 percent.

By the end of July 2015, Vietnam had five 100 percent foreign owned banks, four joint venture banks, 49 foreign bank branches and 51 representative offices.

Bearing limitations on capital mobilization and lending, the credit market share held by foreign invested banks remains modest. In 2014, the outstanding loans provided by the group of banks accounted for 8.28 percent, while the mobilized capital accounted for 8.19 percent.

However, an SBV report showed that the ROA (return on assets) of foreign invested banks in 2014 was 0.61 percent higher than the average ratio of the banking system at 0.51 percent.

The figures, according to Phan Hong Mai from the Hanoi Economics University, showed that foreign invested banks hold smaller market shares, but they have been operating well with effective asset exploitation and high level of capital safety.

She went on to say that once the limitations on foreign banks’ operations are removed, foreign banks will take action to increase their presence in Vietnam.

Malaysian MayBank and Singaporean DBS, for example, plan to open more branches in Vietnam. Public Bank Berhard has fulfilled necessary procedures to become a 100 percent foreign owned bank, while Singaporean UOB has applied for license.

Agribank, a Vietnamese commercial bank, has the biggest total assets – $33.278 billion, which is just a little bit higher than the fourth largest bank in Indonesia – Bank Negara Indonesia with $31.764 billion in total assets, and much lower than Singaporean UOB ($225.114 billion) and Malaysian Hong Leong Financial Group ($57.121 billion).


TBKTVN

MORE NEWS

Ancient town’s full moon festival named intangible heritage

The annual Nguyên Tiêu Festival on the 15th of lunar January in Hội An has been recognised as a National Intangible Heritage by the Ministry of Culture, Sports and Tourism.

Ha Long Bay, Mu Cang Chai among most colourful places in the world

Vietnamese destinations Ha Long Bay and the Mu Cang Chai terraced fields during the ripening season have been selected as the most colourful destination in the world in 2023 following a vote conducted by travel magazine Condé Nast Traveler.

Hailstorm poured on Fansipan peak

A hailstorm accompanied by whirlwinds slammed on Fansipan peak in Sa Pa township in the northern mountainous province of Lao Cai in the early morning of February 5, according to the provincial hydro-meterological station.

Vietnam expects to send 10,000 guest workers to RoK this year

Vietnam’s relevant agencies have stepped up training since mid-2022 in an effort to increase the number of workers sent to the Republic of Korea (RoK).

Vietnamese PM to pay official visits to Singapore, Brunei

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam will pay official visits to the Republic of Singapore and Brunei Darussalam from February 8-11.

In search of internal strength

Vietnam’s economy still relies heavily on the agro-forestry-fishery sector, as the trade surplus of this group accounted for over 75% of the national figure in 2022.

VIETNAM BUSINESS NEWS FEBRUARY 5/2023

Vietnam’s airports serve more than 9.8 million passengers in January

The credit growth puzzle

The fact that banks have refrained from lending does not result from their concerns over the credit growth cap since it has already been revised up without any abrupt surge in new loans. There are other factors influencing how banks lend.

VIETNAM NEWS HEADLINES FEBRUARY 5/2023

State Audit official named as deputy minister of health

Egg coffee – the unforgettable taste of Hanoi

Coffee, enjoyed any time of the day, now comes in different variants. Of them, egg coffee in Hanoi is one of the most popular.

Transport Ministry asked to disburse huge public investment capital in 2023

The Ministry of Transport's Department of Planning and Investment Director Bui Quang Thai said the plan on disbursing VND94.14 trillion for projects with completed procedures has been determined.

Runner Chinh back on track for SEA Games

Sprinter Le Tu Chinh has been back in action after months of absence because of injury.

Women’s football season begins with two events in February

Woman footballers will take part in the National Women’s Cup to warm up for the World Cup later this year.

Multilateral diplomacy hoped to help Vietnam become modern industrial country by 2045

Deputy Minister of Foreign Affairs Do Hung Viet has highlighted the role of multilateral diplomacy in realising the dream of building Vietnam into a modern industrial country by 2045.

Vietnam faces huge inflationary pressure in 2023: expert

The demand-pull and cost-push inflation will put pressure on the country's efforts to control inflation amid surging demand and strengthening of the US dollar which yields increased import prices.
back_to_top