Local banks expand their market share before the foreign invasion starts
Together with their ongoing plans to expand their networks of branches nationwide, local banks are constantly devising different ways to increase their market share before foreign banks in Vietnam land en masse from April 1.
According to specialists, the biggest advantage for domestic banks is their network of branches and customer base.
If local banks do not take the time to expand their networks before foreign banks arrive they will lose the chance to develop their businesses further. The expansion of branch and transaction office networks is by far the most important task for the Vietnamese banking system to complete.
To date, the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), the only listed bank on the HCM City Securities Transaction Centre (HoSTC) and one of the banks that holds a large share of the market in Vietnam, has increased its total number of branches to 165 nationwide. Furthermore, Sacombank expects to open another 14 branches and nearly 40 transaction offices this year, bringing the total number of branches and transaction offices to 230 and this figure is expected to increase to 300 by 2010.
In 2008, Sacombank will open its first representative offices in China and Cambodia and have said that over the past year, the bank has put a lot of investment into network expansion. Furthermore, in efforts to quickly attract more clients, the bank has also carried out a survey of strategic customers and market diversity and has even opened two branches called “March 8 Bank” in Hanoi and HCM City just for women.
Having acknowledged the competitiveness of foreign banks, local banks are now gearing up for an increase in market share by several different ways.
The Orient Commercial Bank, Phuong Nam Joint Stock Bank, Asia Commercial Bank, Vietnam Export and Import Joint Stock Bank, Eastern Asia Commercial Bank and others, apart from investing in infrastructure, opening more transaction points, have also linked up with large businesses and groups to take advantage of their networks and customers. Through these strategic partnerships, banks will have a better chance of attracting new clients as well as investment opportunities. Vo Van Chau, general director of the Orient Commercial Bank, which has sold 5% of its shares to Savico and 5% to Sabeco, said that the objective behind these sales was to let more customers and consumers know about their products through the distribution system s of the partners. The bank will be able to supply top quality products and services to its customers, which is vital as now the domestic financial market has been opened up to foreign investors, the competition to attract new customers is getting tougher.
This is probably why local banks have recently been eager to expand their market share.
The Vietnam International Bank (VIBank) said that this year, this bank would double its number of branches to 120 branches and transaction points nationwide.
According to the State Bank of Vietnam’s HCM City Branch, with a solid customer base and the advantage of branch networks, local banks have enough capacity to be able to compete with their foreign rivals.
Category: Finance
