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Standard Chartered to open 30 branches across Vietnam
Standard Chartered Bank has signalled that it plans to open 30 branches in Vietnam over the next four years, after gaining approval to be the first overseas bank to incorporate their local operations in the country.
Ashok Sud, chief executive of Standard Chartered Bank in Vietnam, on September 15 told reporters in Hanoi that local incorporation would enable it to be better positioned to help Vietnamese companies raise capital in international markets.
The UK bank expressed confidence in the long-term development of Vietnam ’s economy, saying that, “Given the turmoil in the global and local markets, all investments of the bank in Vietnam have been thoroughly considered.”
It is expected that Vietnam’s economy will need an injection of about 50 billion USD. Foreign banks will need to supply some of that capital.
The liberalisation of the banking sector comes amid a worsening economic backdrop in Vietnam, with annual growth revised down to 7 percent and credit growth limited to control double-digit inflation.
But Vietnam remains attractive, because it is one of the least penetrated markets in Asia , with just 1 in 10 of its 87 million population holding a bank account.
Sud added that the effective controls the Government put in place to curb inflation and stabilise the economy demonstrated a sure touch.
In terms of market share in Vietnam , some 40 foreign banks account for less than 10 percent of total lending in the country. Over the next 5-10 years, local banks are still expected to hold an 85 percent market share.
However, the participation of foreign banks like Standard Chartered will help domestic enterprises access high quality banking services.
Standard Chartered Bank owns a 15 percent stake in Asia Commercial Bank (ACB). The UK bank said it had no plans to increase its investment in ACB at this time. In contrasts, HSBC has increased its stake in Techcombank from 15 percent to 20 percent.
Standard Chartered Bank opened its first branch in Vietnam in 1904. The bank has two branches in the country, the maximum permissible. They focus on serving the wholesale banking needs of Asia-based companies in the country.
Standard Chartered Bank plans to sign a contract to loan the Vinacomin group 58 million USD on September 16.
VNA
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