The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) recently opened its first overseas subsidiary in Vientiane, Laos. (Photo: VNA)Hanoi (VNA) – Vietnamese commercial banks are racing to developtheir networks by opening representative offices and subsidiaries in foreignnations, paving the way for them to expand their overseas operations, accordingto market watchers.
The most lucrative destinations are Laos and Cambodia which attracted 32percent of the banks’ total overseas investment of 105.8 million USD in thefirst nine months of the year. This is understandable as Vietnamese businessesthere have proven prospering with billion-USD projects in the fields ofaccommodation, hydropower, telecommunications, agriculture, mining and realestate.
Recently, the Joint Stock Commercial Bank for Foreign Trade of Vietnam(Vietcombank) opened its first overseas subsidiary in Vientiane, Laos.
Located on Lane XangAvenue, a finance-banking hub in downtown Vientiane, the Vietcombank Laoschapter has a charter capital of 80 million USD, the highest among Vietnamesecredit institutions in the country.
According to Deputy General Director of Vietcombank and President ofVietcombank Laos Pham Manh Thang, as the Lao financial market is on its newdevelopment phase, it will be a golden opportunity for the bank to offer perfectfinancial service packages to both Vietnamese investors in Laos and other firmsin the host nation.
At first, Vietcombank will capitalise on its network of 40 business customerswho are registering 1 billion USD in 46 projects in Laos, then it will expandservices to 200 Vietnamese companies in Laos, and Lao businesses andindividuals.
Together with Vietcombank, five other commercial banks are running theirbusiness in the neighbouring country, namely the Military Commercial JointStock Bank (MB), the Sai Gon Hanoi Commercial Joint Stock Bank (SHB), the JointStock Bank for Investment and Development (BIDV), the Vietnam Joint StockCommercial Bank for Industry and Trade (Vietinbank), and the Sai Gon Thuong TinCommercial Joint Stock Bank (Sacombank).
Vietcombank is completing procedures to open a representative office in the USand a branch in Australia. Currently, it has more than 500 branches,representative offices, and member companies in Vietnam and overseas; with over2,100 agencies established across 131 countries and territories.
The BIDV is a pioneer in landing investment in foreign countries, withsubsidiaries and representative offices in six countries and territory ofCambodia, Myanmar, Laos, the Czech Republic, Taiwan (China) and Russia.
Meanwhile, Vietinbank now runs two subsidiaries in Germany, one representativeoffice in Myanmar and a Laos-based branch.
Vietnamese investments outside the border are expected to surge following theimminent signing of a line-up of free trade agreements (FTAs) like theEU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreementfor Trans-Pacific Partnership. In such context, Vietnamese commercial banksmust take actions if they do not want to lose their market shares.
Can Van Luc, a banking and finance expert, said that commercial banks haveenhanced overseas investments to take advantage of the upcoming FTAs, andintegration commitments of the ASEAN Economic Community (AEC).
At present, most of commercial banks’ services only serve Vietnamese investorsin foreign countries, and they have not reached other groups of enterprisesoperating in the host nations yet. However, this is a significant step, whichhelps Vietnamese enterprises gain a foothold in new markets.
According to a development strategy of the banking sector by 2025 with visionuntil 2030 recently approved by the Prime Minister, Vietnam will have at leasttwo banks in the top 100 Asian banks in terms of assets, and three to fivelisted in foreign countries.-VNA
VNA
