If Eximbank’s shareholders approve the proposal on the headquarters relocation, it will be a groundbreaking decision.

The bank’s headquarters is located at Floor 8, Vincom Center, No 72 Le Thanh Ton street, Ben Nghe ward in district 1, HCM City, while the new headquarters would be in the central business district of Hoan Kiem in Hanoi.

Hoan Kiem is called the ‘financial center’ of the country with the presence of the head office of the State Bank of Vietnam (SBV), and a number of commercial banks, including Vietcombank, BIDV, SeABank and Techcombank.

The proposal on the headquarters must get approval from 51 percent of voting shareholders, and the nod from SBV.

Eximbank’s plan to move its headquarters from HCM City to Hanoi surprised shareholders. In the last 35 years of operation, the bank has many clients in the south, which has helped the bank develop and accumulate profits. 

One of the major reasons it is not in the north is the limited credit space. Analysts said the bank can satisfy the requirements of southern clients.

However, SBV has recently changed its view on the issue. At the beginning of the year, the central bank allocated credit growth quotas for the year to credit institutions in its Direction 01/CT released January 15.

Eximbank’s reported credit growth rate in the first nine months 2024 was 13.55 percent, ranking the 12th among 30 commercial banks which publicized their third quarter financial reports.

On August 28, the watchdog agency released a notice which said that the bank with a growth rate reaching 80 percent of the quotas can increase their credit limits without having to ask for permission from the agency.

Some analysts commented that the headquarters relocation is a legal procedure which paves the way for banks to enter new markets with great potential.

Eximbank’s 2023 report showed that by December 31, 2023, the bank had 215 transaction points with 48 branches in 26 cities or provinces nationwide. Of this, there were only 11 branches in the north, including six in Hanoi and five in Quang Ninh, Hai Phong, Nghe An, Bac Giang and Bac Ninh provinces.

The figures showed an imbalance in office distribution in different regions. Eximbank has fewer branches in the north, while the region has attracted much FDI, which can pave the way for Eximbank, which has advantages in providing banking services to import/export companies, to approach large customers.

New technologies now allow banks to access clients without having to spend big money on facilities. Therefore, moving towards the north is expected to be a wise strategy, which may lead to a breakthrough in the bank’s development.

According to Nguyen Tri Hieu, a respected finance and banking expert, LPBank and Eximbank’s decision on the headquarters relocation may relate to their strategy on expanding the market and the client base of their banks.

Hieu believes that many banks want to locate their headquarters in Hanoi because this is the economic, political and cultural center of the country. Also, it is close to central agencies, especially the headquarters of the State Bank.

In the case of Eximbank, Hieu said Eximbank needs strong changes from the board of directors and the leadership, and the headquarters relocation may help Eximbank have a stable, long-term development.

Lawyer Truong Thanh Duc from ANVI Law Firm thinks that banks have relocated their headquarters to better approach markets and clients. This is a part of the banks’ long-term development strategy. 

The location of the bank headquarters depends on the decisions at shareholders’ meeting. However, the proposals made by boards of directors will be approved, because bank owners hold a controlling stake and dominant influence.

The central bank approves most proposals by banks and will only make an intervention if commercial banks have problems in operation and are put under special control. 

Maritime Bank, for example, decided to relocate its headquarters from Hai Phong to Hanoi several years ago. However, as it was put under special control (2001-2003), it was asked to postpone relocation and focus on fixing problems. In 2005, when special control was removed, Maritime Bank officially moved to Hanoi.

Tuan Nguyen