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Citi Vietnam remains strong amid troubles
Citi, the number one US bank by assets, remains committed to Vietnam despite the firm’s recent high-profile troubles.
Citi Vietnam’s managing director Brett Krause said the recent bad news on Citi liquidity and its financial weaknesses have undermined investor confidence in its global business operations, but Citi would continue its presence in Vietnam as the country’s long-term economic outlook was positive.
“Vietnam is among key markets besides China and India for Citi in Asia in the coming years. We see huge business potential here,” Krause said on the sidelines of a $175 million loan agreement signing ceremony last week.
Citi last week reached an agreement with the US government on a series of steps to strengthen Citi’s capital ratios, reduce risk and increase liquidity.
Accordingly, the US government will invest $20 billion in Citi preferred stock and guarantees on $306 billion of Citi securities, loans and commitments backed by residential and commercial real estate and other assets.
“The announcement brings even greater clarity to our overall financial strength and ability to deliver the best service to our clients. We hope it puts to rest the unfounded rumours on our financial position and brings the focus back to the fundamentals of our global franchise,” said Krause.
Krause said Citi’s recent job cuts were global matter only and Citi would not reduce staff in Vietnam.
“We will invest further in Vietnam and the Citi credit agreement with PVTrans proves our commitment,” he said.
A consortium of foreign banks led by Citi last week inked a $175 million credit agreement with PetroVietnam Transportation Corporation (PVTrans), an affiliate of PetroVietnam, to facilitate the latter to buy three Aframax oil tankers to serve the Dung Quat oil refinery. The loan maturity is 13 years.
“The successful closing of this long loan facility amidst highly challenging credit market conditions, both locally and internationally, demonstrates our continued commitment to our clients in the Vietnamese market,” said Krause.
He added that Citi was not among foreign portfolio investors currently heavily selling off Vietnamese securities.
Economists said the current global financial crisis and recessions were the worst in decades and Vietnam could not escape from it and the slow inflow of foreign investment would be challenging for Vietnam to maintain high economic growth next year.
VIR
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