In the next few years, Vietnamese banks are expected to offer more advanced financial services in response to customers’ changing needs. SiddiqBazarwala, publisher from financial magazine Alpha Southeast Asia, talked with VietNamNet about what local banks can do to conquer the fast-growing Vietnamese market.

Mr. SiddiqBazarwala, publisher from financial magazine Alpha Southeast Asia.

What do you think about the Vietnamese banking sector?

It’s evident that the banking landscape is changing very rapidly in Vietnam. A number of challenges still remain, but I’m delighted to see the tightening of regulation and improved oversight of corporate governance in Vietnam in recent years, coupled with ongoing investor euphoria about Vietnam as the next most exciting emerging market with the largest upside. All of this positive news has led to the rise of a handful of key banks especially over the last five years. 

Moreover, the well-known credit rating agency Fitch recently classified Vietnam’s outlook as “stable” and reaffirmed Vietnam’s credit rating at BB-. This rating only validates our earlier point about the stable base that carries the Vietnamese banking industry today. 

To that end, a number of banks in Vietnam are busy developing a wide-ranging suite of domestic and cross-border products or solutions for their respective target market and as the needs of the consumers mature. I can see that more banking customers in Vietnam now demand their banks to excel in cash management and trade finance services, instead of simply delivering basic services like before.

With this eagerness for growth, one can only expect further sophistication in the overall offering from the banking industry in Vietnam.

In your opinion, why do customers in Vietnam focus on cash management and trade financial services of their banks?

Mr. Nguyen Xuan Minh, head of Techcombank's Investment Banking Division, receives the Best Bank in Vietnam (2007-2016) Award from the Chief Editor of Alpha Southeast Asia.

It reflects the changing needs of customers in this era. Gone are the days when corporate and commercial banking customers in Vietnam only required simple financial services. As a result, to excel as a premier choice for any company, Vietnamese banks need to develop a whole suite of cash management and trade finance solutions. That means financial institutions should offer not only products to be bought and used, but also well-thought-out solutions that can help companies of all sizes become more efficient. 

To reflect this shift, large leading financial institutions, rating agencies, as well as regional financial publications like Alpha Southeast Asia, all emphasize the rating of banks’ trade finance and cash management products in terms of availability, breadth and depth. 

Chief financial officers and corporate treasurers today rely on such benchmarks when making decisions on which bank they want to work with. Therefore, I’m confident that there will be a continuing need to scrutinize and evaluate the suite of trade finance and cash management products and solutions at Vietnamese banks, in the next decades.

The Alpha Southeast Asia has organized the Best Financial Institutions Awards in ASEAN since 2006. How have your awards improved to reflect the changing world of finance in Southeast Asia and specifically Vietnam?

2016 indeed marks the tenth year that we evaluate both financial and non-financial fundamentals of financial institutions and banks in the dynamic ASEAN region. Over the years, we have worked closely with a large number of banks in Singapore, Indonesia, Malaysia, Philippines and Thailand to develop and fine-tune the awards methodology of our Best Financial Institutions Awards. 

As the years went by, we have tightened the awards’ eligibility to make sure that it corresponds with ASEAN’s increasingly sophisticated financial sector. For this year, we only selected a small, niche and highly focused number of well-managed banks, which boast a solid balance sheet and transparent risk management systems, as nominees for the awards. 

With this in mind, we are pleased to welcome Vietnam’s Techcombank into this group of world-class Asian living banks, including DBS and OCBC from Singapore, Maybank and CIMB from Malaysia, BDO and BPI from the Philippines, Bank Mandiri and Bank Negara from Indonesia, Bangkok Bank and Siam Commercial Bank from Thailand. 

Specifically, Techcombank has won the awards for Best Bank in Vietnam, Best Trade Finance Bank in Vietnam and Best Cash Management Bank in Vietnam.

Why was Techcombank chosen for the awards this year?

For the Best Bank in Vietnam Awards, we highly appreciate Techcombank’s healthy financial ratios such as profits, the non-performing loan ratio, provisions, return-on-equity, capital adequacy ratio and more. Techcombank has emerged as a bank of choice for not only corporate and treasury clients but increasingly retail customers across Vietnam. 

For the Best Trade Finance Bank in Vietnam and Best Cash Management Bank in Vietnam Awards, we can see that Techcombank has built up its forex trading capabilities, import and export turnover volumes, as well as improving risk management. 

As the first domestic bank to establish a transactional banking division for corporate clients, Techcombank has made its name as the leading cash management services provider in Vietnam. The bank is inarguably the only Vietnamese bank to streamline the processing of all cash and trade related transactions as a single unit, making it a reliable partner in treasury and cash management services.

It’s noteworthy that the bank’s brokerage house, named Techcom Securities, has also won the Best Bond House Awards. The securities firm has built up an extensive track record in bond issuance advisory, including over VND64.6 billion ($2.8 billion) in straight bonds to-date, thus securing its position among in top 3 players in the local currency bond market.

PV