In late 2007, Sacombank stirred up the public when announcing the opening of a representative office in China, because this was for the first time a Vietnamese bank reached out to the world market. Just after a short time after the exploration move, Sacombank opened a branch in Laos in 2008 and in Cambodia in 2009.
Since then, a lot of other banks opened bank branches, insurance and securities companies’ branches in Laos, Cambodia, Czech and Singapore in the plans to penetrate foreign markets after they succeeded in the domestic market.
After a short period of doing business in the foreign markets, banks all have reported satisfactory achievements. Just two years after opening the branch in Cambodia, Sacombank opened a 100 percent Vietnamese owned bank in the country.
By March 29, 2012, Sacombank in Cambodia had mobilized 47 million dollars in capital, while the outstanding loans had reached 60 million dollars.
Just after some years of doing business in Laos and Cambodia, the Bank for Investment and Development of Vietnam (BIDV) has become one of the leading markets. BIDV has also revealed the intention to open a branch in Myanmar when the country opens its market.
Most recently, in February 2012, SHB opened its first branch in Cambodia. Just within one week after the inauguration day, SHB Bank in Cambodia mobilized 2.5 million dollars, mostly from the public. Do Quang Hien, Chair of SHB, has stated that the bank is following a strategy to expand its business abroad.
A lot of other banks are also planning to conquer foreign markets. Maritime Bank is considering setting up branches or 100 percent Vietnamese owned banks in foreign markets, possibly Laos and Cambodia.
Two years ago, analysts predicted a growing tendency of domestic banks making outward investments. However, they said that Vietnamese banks are just taking the first steps to conquer the world market, and that they are just capable to penetrate easy and nearby market.
In fact, the biggest banks in Vietnam, including Vietcombank, ACB and BIDV, also cherish the hope of conquering far and choosy markets like Europe, the US or Eastern Europe. However, to date, only VietinBank has set foot on the European market (Frankfurt in Germany).
Dr Pham Huy Hung, President of VietinBank, said that the presence of VietinBank in the biggest finance center of Europe shows the bank’s strategy to become the Vietnamese leading finance group capable to compete with other international banks. Hung said VietinBank is also considering expand its business scale to other markets such as Czech, Poland, the UK and France.
However, it would be very difficult for Vietinbank to implement its ambitious plan. VietinBank is a big bank in Vietnam, but its scale in Germany remains modest.
Dr Nguyen Tri Hieu, the first Vietnamese person who set up a bank in the US, has noted that the operation scale of Vietnamese banks in foreign countries remains small. It does not require much capital to set up a branch or a representative office in foreign countries. A bank just needs to have 15-20 million dollars to open a representative office in the US.
However, Hieu said that once operational in the market, investors would have to strictly follow the laws set up by the US Federal Reserves and the laws of the states. Meanwhile, Vietnamese enterprises still lack the consciousness of abiding the laws.
ACB, Vietcombank and BIDV once got the permission from the central bank to open a representative office in the US, but they have not got the nod from the US agencies.
Meanwhile, it took BIDV several years to begin making profit in Cambodia. Meanwhile, Sacombank has closed the representative office in China after three years of operation in China. Source: TBKTVN