Existing foreign financial institutions in Vietnam are increasing capital, while new entrants are joining the market, local daily newspaper Vietnam News reported on Friday.
This week alone, the State Bank of Vietnam, the country’s central bank, announced it had approved capital increases for Malaysia’s Public Bank Vietnam Limited and South Korea’s Shinhan Bank Vietnam. Meanwhile, Japan’s Sumitomo Mitsui Banking Corporation in Ho Chi Minh City got the central bank’s permission to extend their tenure for an additional 99 years.
Foreign banks are also promoting their in-depth development in the Vietnamese market. South Korea’s Woori Bank Vietnam Limited has recently received approval from the central bank to add stock depository services to its license, and South Korea’s Shinhan Card has opened Shinhan Vietnam Finance Company in the city.
According to the central bank, the growth rate of equity capital and charter capital of foreign joint venture banks was always two to three times higher than that of both state-owned and private Vietnamese commercial banks.
As of the end of April, the equity capital of foreign joint venture banks had increased by 8.7 percent to more than 177 trillion Vietnamese dong (nearly 7.7 billion U.S. dollars), while the growth rate of state-owned commercial banks was 5.06 percent and of private Vietnamese commercial banks was 4.18 percent.
Vietnam currently houses nine foreign-owned banks, about 50 foreign bank branches, more than 50 representative offices of foreign credit institutions and many foreign-owned finance companies.
The central bank has set the 2019 credit growth target at about 14 percent, down from the 17-percent target set for last year.