The HSBC Group is urgently planning to set up its first subsidiary bank in Vietnam. If approved, this will be one of the first wholly foreign-owned banks that are established in Vietnam.
On the sidelines of the second annual Vietnam Investment Forum yesterday at the Melia Hotel, Hanoi, general manager of HSBC Vietnam Alan Cany confirmed that the HSBC Group is boosting its plan to establish a subsidiary bank as soon as possible after the government of Vietnam approves it to do so.
“With the establishment of a 100% foreign-owned subsidiary bank, we expect to open from five to ten branches in Vietnam in four-five upcoming years,” added Alan.
According to Vietnam’s WTO commitments in the banking industry, as of April 1, 2007, 100% subsidiary banks are allowed to operate in Vietnam and are treated as equally as domestic banks to provide most main banking products and services.
In order to receive the SBV approval to set up subsidiary banks, foreign parent banks must obtain total assets of no less than US$10 billion each at the end of the year before they submit the application profile to the SBV to establish subsidiary banks.
If wanting to open branches, parent banks must obtain assets of US$20 billion each and the registered capital for each newly opened branch is at least US$15 million.
After Vietnam became a full member of the global trade organisation, several foreign banks have been interested in Vietnam and questioned about the conditions as well as procedures to invest in the country. Since then, the HSBC Group is the first bank that has confirmed its investment plan.
Participating the forum yesterday, general director of the global HSBC Group Mike Geoghegan anticipated working meetings with prime minister Nguyen Tan Dung, governor of the State Bank of Vietnam Le Duc Thuy and finance minister Vu Van Ninh. The content of these meetings was not disclosed, but Mike Geoghegan said that he would talk about the future of HSBC in Vietnam as well as its investment commitments hereby.
Along with the plan to establish a subsidiary bank, the HSBC Group also will double its share holdings in Vietnam’s Technological and Commercial Joint Stock Bank (Techcombank), right after the government of Vietnam increases the cap on the strategic foreign stake holding in a local joint stock bank to 20% instead of the current 10%. In order to continue to purchase another 10% of shares of Techcombank, HSBC will have to spend US$85 million, up three times compared to the amount of US$27 million that this group invested in Techcombank in 2005.