Hong Kong and Shanghai Banking Corp (HSBC) has introduced personal financial services to Vietnamese clients, particularly in the north. Strong participation by a leading foreign bank ensures the market is robust.
Together with economic development, many banks operating in Vietnam over the last five years have actively promoted retail and banking operations. Numerous credit products have been launched to serve personal financial demands, such as overseas study loans, home loans, and automobile financing. In addition, banks are offering payment services such as credit cards, cash cards and so forth. According to Alain Cany, HSBC general director in Vietnam, the number of individual HSBC clients in HCM City is in the thousands. Revenue from retail banking operations accounts for up to 15% of HSBC’s income. “Economic development together with behavioural changes among customers from buying goods by cash to borrowing money from banks to go shopping will boost retail banking revenue of commercial banks in the forthcoming time,” said Alain Canny.
In 2000 Vietnam had just 10% of HSBC’s total clientele, a figure that has climbed to 35%. The number of domestic clients increased dramatically after the bank cooperated with Mercedes-Benz to facilitate loans to clients for automobile purchases, in the form of instalment payments. In addition to home and automobile loans, HSBC has also developed personal financial services such as card services and deposit accounts.
That many banks have simultaneously launched such retail-banking services has offered clients various choices for the best supplier. Each bank has attempted to create competitive strength in terms of pricing, lending incentives, and capacity of loan accession for different products targeted at certain clients. Presently, because foreign banks are encountering legal obstacles, for example, not being allowed to develop the ATM system outside their headquarters, mandatory demands for overly high investment capital when opening a new branch, and not being permitted to receive foreign currency-based deposits from Vietnamese nationals, have meant that retail-banking operations of foreign banks for Vietnamese clients are still targeting at a specific clientele. To overcome the aforementioned hurdles, according to Alain Cany, HSBC is eyeing several successful businesses and Vietnamese administrators and managers that have increasingly high and diversified demands for financial services. HSBC wants to take advantage of its global network and financial capacity to provide services with longer terms, and bigger loans compared to domestic banks.