Domestic banks will likely face tougher competition in gaining retailing market share with foreign rivals, which are powerful in capital sources and technologies, former governor of the central bank of Vietnam Cao Sy Kiem has warned.
Vietnamese banks should prepare for the race from now or otherwise they may die because the country will officially open the banking sector for foreign investors in 2009, Kiem urged.
The ex-governor pointed out shortcomings of domestic banks: lacking capital sources, technology and weak capacity of staffers despite rapid growth in recent years.
The retailing banking market is not tapped effectively, because clients of banks are small and medium enterprises and individuals, Kiem said.
To survive, Vietnamese banks should work out strategies on effective banking management; invest more to improve technology, particularly train staffers, Kiem elaborated.
Commercial joint stock banks are now speeding modern technology application, diversify services, and train professional staffs to gain a pie piece of the retailing banking market.
East Asia Bank (EAB) has sought to develop e-bank services, bank cards whilst Saigon Thuong Tin Commercial Bank (Sacombank) is aiming to serve individual, small and medium businesses.
The heavyweight, Hong Kong and Shanghai Banking Corporation (HSBC) is now racing to expand its operations in the retailing banking market because HSBC wants to enjoy Vietnam’s achievements with average GDP growth rate of 7 per cent/year and per capita GDP doubled over the past 10 years, foreign direct investments soared 55 per cent a year.
HSBC will launch new credit, payments and monetary management services, particularly the retailing banking services, as eight percent of the population use bank accounts now, Tom noted.
Namita Lai, director of Standard Chartered in charge of retailing bank director will debut retailing bank service in Ho Chi Minh City June 27 to provide credit services for Vietnamese clients. Standard Chartered will expand staff to 150 from 41 now to meet high-quality service demand in Vietnam.
Standard Chartered will open 30 outlets across the country in the next three years, Lai noted, believing Vietnam’s retailing bank market will grow 30 per cent in the ten years to come.
Currently, as many as 152 credit institutions are operating in Vietnam, seven are state-owned, thirty-one urban commercial JS banks, four rural commercial JS banks, thirty seven foreign-invested banks’ branches, six joint venture banks, nine finance companies, twelve finance-leasing companies, forty six representative offices of foreign banks, according to State Bank of Vietnam. (
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