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Too many banks in Vietnam, says Stanchart chief
Vietnam’s banking industry is too small to support its 80 plus banks and the number should be scaled down to boost efficiency, Louis Taylor, general director of Standard Chartered Vietnam Bank, has said.
In an online interview to the Vietnam Economic Forum about the Vietnamese economy, he said it was also necessary to have appropriate policies to create a healthy banking system.
The State Bank of Vietnam’s move to increase banks’ minimum chartered capital to VND3 trillion and their capital adequacy ratio to 9 percent was sound.
It would be relatively difficult for Vietnamese banks to raise the money and would help purge weaker banks.
Earlier this year Standard Chartered Bank had forecast Vietnam's economic growth this year at 7.2 percent. But following some new developments, it had adjusted its forecast to around 6.3 percent, " not a bad sign for the Vietnamese economy”.
In the short term the central bank's anti-dollarization policy was essential. The government could not control the supply of dollars and gold but could control the flow of dong into the market. The dong could drop slightly in Q3 and Q4, falling to VND21,800 by end of the year.
"Only 15 percent of the [Vietnamese] population have bank accounts. So this is a promising market."
The entry of international banks would not threaten local players because they have close relationships with business and retail customers.
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