Domestic banks eye Indochina

http://vietnamnews.vnagency.com.vn

09-07-2009

HA NOI — Several domestic banks are moving into international markets, especially less developed markets in the Indochina region.

After launching a branch in Phnom Penh, Cambodia, late last month, Sacombank completed its plan to break into the Lao and Cambodian markets.

At the branch inauguration, chairman of Sacombank’s executive board Dang Van Thanh said he expected Sacombank’s Phnom Penh branch to become a major player in Cambodia’s banking system.

Thanh said Sacombank would open more branches and transaction agents in Laos and Cambodia in a move to target the countries’ small- and medium-sized enterprises as well as local and Vietnamese residents.

Preparing to make its own breakthrough in the international market, Techcombank in April signed a payment agreement on border areas with the Industrial and Commercial Bank of China.

The Bank for Investment and Development of Viet Nam (BIDV) also mapped out plans to exploit the Lao market by calling for more investment in five provinces in northern Laos.

Tran Bac Ha, BIDV executive board chairman, said that in addition to promoting trade and investment with Vietnamese businesses in northern Laos, the bank would also act as a financial intermediary between businesses in the two countries.

Though it already has a representative office in the US, Vietcombank deputy general director Nguyen Thu Ha said the bank planned to set up a remittance company to make sending payment between the two countries easier.

However, Ha recommended domestic banks target less developed markets like Laos and Cambodia because they would be less competitive.

Though Viet Nam’s banking system has made great strides in recent years, there were still concerns about shortcomings in experience, risky management, technology and human resources.

A bank’s general director, who declined to be named, said if Vietnamese banks failed to deal with their shortcomings, they could face major risks operating in international markets.

Ha also said that banks must carefully select and study international markets to see whether expansion plans were suitable. — VNS