|
Winds of change and banking market shares
In talks with the press, foreign banks are always reserved when talking about the market shares they want in the near future, when Vietnam opens its market. However, banking experts have warned about the big changes that will occur when foreign banks can enjoy full national treatment like domestic banks.
Statistics of the State Bank of Vietnam show that the operational 36 joint-stock banks now make up 20% of total mobilised capital and credit market share. Foreign banks and joint-venture banks (35) make up 10% of total mobilised capital and the credit market, and mainly serve foreign individual clients and companies which have investments in Vietnam.
In an interview with Dau tu chung khoan newspaper, General Director of Standard Chartered Vietnam, which has just got a licence to operate as a foreign entity, predicted that domestic banks will still hold 80-85% of the market share in 5-10 years, while foreign banks 10-15% instead of 10% currently.
However, economists have warned that foreign banks will be redoubtable rivals for Vietnamese banks as they are trying to learn more about the tastes of Vietnamese clients. Mr Ashok Sud also said that he would not bring the most modern products to Vietnam, but introduce the products most suitable to Vietnamese people.
Nguyen Quang Hung, Director of the Banking Institute, said that the biggest advantage of foreign banks lies in services. HSBC, for example, has turnover from international payment services accounting for 1/3 of total turnover of the bank. Three years ago, its Vietnamese clients accounted for 3% of total clients only, while the figure has risen to 50%, and it is expected to increase to 70% in three years.
Vietnam proves to be a promising market for foreign bankers. Economists have said that the banking industry’s growth rate is expected to be double the GDP growth rate. As such, the banking sector will be two-fold bigger than at present in 6-7 years.
VNN
|
