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Banks look overseas

VietNamNet Bridge – Under the approval of the State Bank of Vietnam (SBV), Sacombank has become the first commercial bank of Vietnam to have a representative office abroad. This move proves that Vietnamese banks now are not only focusing on competition in the home market but aspiring to go abroad.

Looking for foreign markets

A mission of Sacombank has gone to China to perform formalities to open the bank’s representative office in Nanning city, Guangxi province.

Chinese authorities have agreed in principle and the office will be put into operation later this year. At the same time, Sacombank has applied to open branches in Laos and Cambodia. The bank’s rep. office in China will survey the economic, finance and banking, monetary, and credit situation in China to seek business opportunities for Sacombank.

By opening this rep. office in Guangxi, Sacombank has become the first commercial bank of Vietnam having an overseas rep. office.

Opening rep. offices or branches is not a new thing for the Bank for Foreign Trade of Vietnam (Vietcombank). Several years ago, this bank had a plan to open a branch in the US but owing to many reasons, Vietcombank couldn’t enter this finance-banking centre.

In 1970, Vietcombank had a financial company in Hong Kong, the Vietnam Finance Company. At that time, the role of this company was great when international payment in Vietnam faced many difficulties. But now, as means of payment are diverse, Vietcombank needs to have a branch with many more functions.

With its potentials, Vietcombank could open branches in neighbouring countries but the bank has a bigger dream in wanting to set up a branch in the US.

“The first move abroad shows that we not only know how to take defensive measures but also attack,” said Dang Van Thanh, Chairman of Sacombank Board of Directors.

The prestige of banks

A banking expert raised concerns about a regulation which could hinder the operations of banks. Once he went to the My Xuyen Commercial Joint Stock Bank in the southern province of An Giang to exchange US$1,000 into Vietnam dong. The bank’s staff said that as a rural bank, My Xuyen didn’t have a licence to exchange foreign currencies and they told him to go to a gold shop next door.

“Why can a gold shop exchange foreign currencies but a bank with capital of VND500 billion (US$31.250 million) is not licenced to do so?” he asked. This shows that banks are being restricted by irregular rules.

Recently, three banks, the HCM City Housing Development Bank, Phuong Nam Bank and Saigon Bank, have been licenced to trade gold on foreign accounts, raising the number of banks permitted to do so to ten. The Southeast Asia Bank is permitted to perform payment factoring service.

The above expert said that these were high-class services that could increase the prestige of banks. “With those tools, banks can get nearer to people and enterprises,” he said.

(Source: SGTT)

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