Though the banking sector is facing a lot of difficulties, many foreign banks remain eager to “shake hands” with Vietnamese banks. Meanwhile, foreign banks in Vietnam say they can see bright prospects in the market.
Tran Thi Thanh Thanh, Chair of Mekong Bank, has revealed that the bank has found a strategic partner to sell 20-30 percent of its additional chartered capital. Selling stakes to foreign partners is a part of the bank’s plan to increase capital from one trillion dong to three trillion dong in 2010. Thanh said Mekong Bank will officially provide more information about its foreign partner in the next month and will complete its capital increase plan in order to meet the requirements on charterd capital. Under the current regulations a bank must have a minimum chartered capital of three trillion dong by the end of 2010.
To date, Mekong Bank has several big shareholders, including Maritime Bank which now holds 10 percent of stakes of the bank.
Analysts say that Vietnamese banks are hurrying to sell their stakes to strategic partners in order to increase their capital as requested by the central bank. And of course, domestic banks think of foreign partners when they looking for partners. It is expected that more banks will announce the plan to sell stakes to foreign partners by the end of this year or early next year.
Hoang Van Toan, Chair of TrustBank, also said that his bank has found foreign partners, but now is not the right time to announce the news and provide information about the partner. In their plan to sell 100 million shares with a face value of 1100 billion dong to increase the chartered capital from two trillion dong to 3100 billion dong, OCB has reserved 29 million shares at minimum to sell to their existing foreign strategic shareholder – BNP Paribas. After their purchase, the French banking group will raise its ownership ratio at OCB from 15 percent to 20 percent.
Most recently, Australian Commonwealth Bank (CBA) has also purchased 15 percent of stakes of VIB Bank (60 million shares) to become the largest strategic shareholder of the Vietnamese bank. After selling 15 percent of stakes to CBA, VIB’s chartered capital increased by 600 billion dong to four trillion dong. Under the agreement signed between the two sides, from October 2010, CBA and VIB will start a long term program on capability transfer, under which the foreign bank will help VIB increase its management and business capability, and upgrade risk management and competitiveness.
Meanwhile, foreign banking entities have expressed their satisfaction with their operation in Vietnam.
In a recent interview given to Dau tu newspaper, General Director of Standard Chartered Bank Vietnam Louis Taylor said the “playing field” for foreign banks in Vietnam has become flatter, while the implementation of Vietnam’s WTO commitments in the banking sector has brought satisfaction to foreign investors.
“After three years of joining WTO we have realized that the playing field has become flatter for foreign banks. Therefore, we officially opened our 100 percent foreign owned bank in Vietnam on August 1, 2009,” he said.
The general director has said that Standard Chartered has got the license to provide the banking products it wants to provide. Meanwhile, the bank is still seeking the permission to further expand its business in Vietnam.
“It is easier to open new branches now than two or three years ago. We are satisfied with our achievements and will be even more satisfied after Vietnam implements its WTO commitments,” he said.
Under the commitments, from January 1, 2011, 100 percent foreign owned banks such as Standard Chartered Vietnam will be able to provide all the banking services like Vietnamese banks.
When asked about the competitivenesses of foreign banks and domestic banks, he said that foreign banks have advantages in capital, management skills and technology. However, foreign banks will still have to adjust their business strategies in order to make them fit Vietnam’s market.