Several local banks are preparing to invest in other countries, focusing first on neighboring markets and then on those destinations their customers are moving to, said central bank officials.
Dang Thanh Binh, deputy governor of the State Bank of Vietnam, told the opening ceremony of Military Bank’s branch in Cambodia’s Phnom Penh last week that several local banks were following Military Bank’s footsteps.
“Several Vietnamese banks have been deploying plans to expand their business overseas,” he said.
Some other banks that are speeding up their plans include Vietnam Maritime Commercial Bank (Maritime Bank) and Saigon-Hanoi Bank, the latter mulling a branch in Cambodia, said another central bank official.
According to a well-informed source, Maritime Bank has undergone necessary procedures to set up its wholly-owned bank in Cambodia. It also intends to establish other offshoots in Laos and Cambodia, including 100% foreign-invested branches, banks and affiliate companies active in securities, finance leasing, insurance and overseas remittances.
Le Cong, general director of Military Bank (MB), confirmed to the Saigon Times Daily that his bank’s next possible investment destinations are Africa or Eastern Europe.
Tran Bac Ha, chairman of Bank for Investment and Development of Vietnam (BIDV), asserted that the bank had been expanding its business activities to Laos, Cambodia, Czech and Myanmar.
Pham Huy Hung, chairman of Vietnam Bank for Industry and Trade, or VietinBank, said his bank had established a representative office in Frankfurt in Germany last year and inaugurated the first branch there in September. In the long run, VietinBank will upgrade the Frankfurt branch into a full-service bank besides opening branches in Berlin, Czech, Poland, Britain and France, Hung said.
There are 4 domestic credit institutions operating in Cambodia for the time being.
The Vietnamese Government supports and encourages lenders to accelerate outbound investment while the Cambodian Government also applies incentive policies to lure investment from foreign investors, especially from Vietnamese enterprises.
In the meantime, a large number of Vietnamese firms are doing business in Laos, creating good opportunities for local lenders to develop their financial services there.
MB’s CEO Le Cong said his credit institution had achieved good growth this year, with total outstanding balances of approximately US$100 million and a profit of US$500,000.
“We will regularly host customer conferences to share business experiences in Cambodia and Laos and will continue to invest in these markets when necessary,” Cong said.
He hinted at the need to upgrade a branch into the 100 percent Vietnamese-invested bank as only a 100 percent foreign-invested bank can legally serve its clients outside its location.
