1.
Overview
Vietnam’s banking sector has shown significant improvement which
results from stable inflation and interested rate, favorable environment for
foreign direct investment and a shift from deficit to surplus of the country’s
current account. This sector plays a crucial role in Vietnam’s economic
development in recent years.
2.Banking system
There are two tiers in banking sector in Vietnam. The first one
is State Bank of Vietnam (SBV) which is responsible for monetary policy and
supervision/regulation of the banking system in Vietnam. The second one
consists of commercial banks, financial companies, credit co-operatives,
people’s credit funds, and insurance companies. The main activity driving
banking system is commercial bank which includes 5 state-owned commercial
banks, 33 joint stock commercial banks, 5 joint venture commercial banks and 5
wholly-owned foreign owned bank.
State owned commercial banks (SOCB) account for more than 40% of
market share. The largest bank in terms of total assets, network and still 100%
state owned share is Agribank. And four other SOCB areVietcom bank, Viettin
Bank, BIDV and MHB.
Joint stock commercial banks (JSCB) have small capital/deposit
base and more diversified shareholding structured compared to state owned
commercial banks. There are currently 33 JSCB, which the leading ones are
SaiGon Joint Stock Commercial Bank (SCB), Military Joint Stock Commercial Bank
(MBB), Vietnam Export Import Commercial Joint Stock Bank (EIB), Asia Commercial
Bank (ACB) and SaiGonThuong Tin Commercial Joint Stock Bank (STB)
Also SBV had granted 5 licences to permit HSBC, Standard Charter
Bank, ANZ Bank, Shinhan Bank and Hong Leong Bank to establish as wholly-owned
foreign banks
3.Potential opportunities for foreign
investment
There are solid evidences to prove that Vietnam’s banking sector
has such a huge potential for foreign investment
- Government effort of reforming
banking system
- Trade agreements facilitate
foreign ownership and investment
- Vietnam- a destination of
foreign investment in South East Asian market
SBV suggested that merge and acquisition of loss making and
incompetent bank would be necessary to improve efficiency within the industry.
For example, in 2015, SBV forced merge of loss making Vietnam Construction Bank
to Vietcom bank with purchasing share price for 0 VND. By forcing merge and
acquisition of incompetent banks, SBV has increased exploitation of economies
of scale and the reduced burden on regulators
Have taken part in variety of trade agreement such
as Trans Pacific Strategic Economic Partnership (TTP), Association of
Southeast Asian Nations (ASEAN) and Free Trade Agreement with different
countries, Vietnam has made restructuring move to standardize banking system
which will be compatible and accessible to other countries. Vietnam is required
to have bilateral arrangement which eliminate the challenges of foreign
establishment of banking services.
The government also encourages foreign investors to hold shares
for five year period and partnering with the local bank to enhance management,
capacity or new development. With the 30% limit of oversea ownership to
domestic banks, the strategic foreign investors are allowed to acquire up to
15% of share in a bank, and up to 20% with Prime Ministerial approval.
HSBC has also invested in a leading local bank, possessing a 20% stake in
the Vietnam Technological and Commercial Joint Stock Bank—Techcombank. It is
also the sole foreign strategic partner
of the BaoViet Finance-Insurance Group, Vietnam’s largest insurance
company. In a vote of confidence in the insurer, HSBC increased its
stake to 18% in October 2009.
There is a huge untapped market in Vietnam. According to SBV, only 20%
of more than 90 million citizens in Vietnam hold bank accounts and 3% of the
population have credit cards. With 87% of the population under the age of 54,
there is a great opportunity for retail banking activity development in Vietnam.
Also it is agreed that SME and rural areas have had challenges
to access bank investment and loan. The data of Asian Development Bank shows
that “lack the capacity to assess the risk of investment into
SMEs and find bankable projects” and lack of knowledge about loan and lending
systems for rural citizens are the main reasons leading to currentunder-banked
circumstances.
The stable economic with GDP growth of around 6% to 7%; low wage
costs; a large population with a high savings rate and lack of innovative
approach to the market are advantages for foreign investors to accelerate
financial and industrial development in Vietnam market.
ANT Consulting is here to assist you from the
outset; providing corporate intelligence, risk advisory,
management consulting services that assist market entrance, and ensure
efficient business start-up operation. Our services are as following:
We strive to save your cost by guiding you
towards economical solutions that comply with local legislation and procedures.
We support you through early logistic solutions and carry you through as
your business grows. We
aim to bridge the gap between international best practices and local cultures
and assist foreign companies and organizations entering Vietnam market to overcome
commercial and regulatory issues.
We could be reached at
email: ant@antconsult.vn or
tel: +848 3520 2779 . To learn more about us, please visit
www.antconsult.vn
0 nhận xét:
Đăng nhận xét