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SBV Governor highly values role of foreign credit institutions in Vietnam
The Year-End Gathering with representatives of international financial institutions and foreign credit institutions was held at the head office of the State Bank of Vietnam (SBV) in Hanoi on December 10. The gathering chaired by SBV Governor Nguyen Van Giau, was also attended by the SBV Management Board and representatives of SBV functional departments.
Addressing his guests, the SBV Governor appreciated the role as well as the contribution of foreign credit institutions to the development of Vietnam’s economy and its banking sector. He hoped that with rich experiences, advanced management capacity, and diversified ranges of products and services, foreign credit institutions will continue to bring into full play their important role and make positive contribution to the stable growth of Vietnam’s financial market and economy.
He added, during 2008, Vietnam’s economy has faced with macroeconomic instability, high inflation, and liquidity problem facing several banks. Under the Government’s strong direction and consistent measures with the first priority of controlling inflation, the SBV conducted tight monetary policy and managed to contain the high credit growth of the banking system in a flexible manner. The above mentioned measures have brought about positive effects, namely the gradually decreasing rates of inflation, macroeconomic stabilization, and substantial improvements of bank liquidity conditions.
However, Vietnam’s economy in general and banking sector in particular are still facing with many challenges and problems due to the unceasing movements of the current financial crisis and global economic recession. The SBV has been watching closely domestic and international developments, and enhancing international cooperation with central banks and supervisory agencies in the region and the world in order to have timely and efficient responses when necessary.
Governor Nguyen Van Giau asserted that 2008 also marks a year where Vietnam has strictly fulfilled its WTO commitments as evidenced by the event of granting licenses for commercial presence of 03 foreign banks under the new form of 100% foreign owned bank in Vietnam. The increasing presence of foreign credit institutions showed the attractiveness of Vietnam market, and at the same time forecasted the increasingly competitive pressure in the financial and banking sector.
For his part, SBV Deputy Governor Nguyen Van Binh briefly reported the external relations of the SBV and activities of foreign credit institutions in Vietnam. He stated that Vietnam, in 2008, has been provided with valuable support and assistance both technically and financially from international monetary and financial institutions and multilateral and bilateral partners.
As of November, Vietnam has concluded negotiation with the WB and ADB for 16 programs and projects totaling USD 1.7 billion; and is projected to finish negotiation of the remaining two projects valuing USD 165 million by the end of the year. To date, on behalf of the Government, the SBV has signed Financing Agreements of 12 programs and projects with the WB and ADB with the value of more than USD 2,3 billion, bringing total number of loans signed with these institutions to 157 with the total value of USD 13.4 billion.
One of the remarkable diplomatic events of the SBV in 2008 was the successful hosting, for the first time, of the ASEAN Governor and Deputy Governor Meetings. Moreover, the SBV has also made great achievement in enhancing the role of Vietnam on the international forums of such institutions as the IMF, WB, and ADB. At the ADB Annual Meetings this year, the SBV Governor successfully fulfilled his role as the co-chairman of the institution’s Board of Governors’ meetings. Then, at the IMF/WB Annual Meetings, our Governor was again appointed as chairman of the IMF/WB 2009 Board of Governors’ Meetings, the highest position to chair the Board’s meetings next year.
In regard to the activities of foreign credit institutions in Vietnam, he added, there are 33 foreign banks that were approved to open branches, 5 joint venture banks with 19 subsidiaries, 3 wholly foreign owned banks, 9 foreign-invested non-banking credit institutions, and 54 representative offices. Although some foreign bank branches and finance companies experienced losses, the group as a whole still registered the overall income before tax of VND 1,418 billion.
He said that these institutions have been acting as a bridge between foreign investors and Vietnam’s markets and businesses, and have also significantly supported the SBV and the domestic commercial banks.
The year 2008 continued to witness the enhancement of the close relationship between the SBV and international financial and monetary organizations and bilateral and multi-lateral partners, as well as the continuous growing of foreign credit institutions in Vietnam. Last week, at the CG meeting this year, the donor community committed to financing over USD 5 billion in the forms of development assistance for Vietnam in 2009. This figure showed international community’s support for the socio-economic development cause of Vietnam and evidenced that Vietnam is on the right track to development.
SBV
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