In 2010, the competition among domestic and foreign banks will be fairer in Vietnamese market. The establishment of 100 percent foreign invested banks now becomes more popular compared with two years ago.
Currently five wholly foreign invested banks including HSBC, ANZ, Standard Chartered, Hong Leong and Shinhan Bank are licensed to operate in Vietnam and many other applications are waiting for Vietnamese authorities' consideration. The network expansion and product diversification of foreign banks will also increase the competitive pressure on local lenders.
According to WTO commitment roadmap, seven years after joining WTO, Vietnam will remove all limitations on operation of foreign banks in the market. There will not be differences in regulations on network, transaction value, staff number, lending and capital mobilisation between local and foreign banks. Thus, the business of foreign banks will be expanded along with the similar development trend of Vietnam's banking system.
Wholly foreign invested banks now are quickly widening operation scope and enhancing the retail banking services. Particularly, HSBC Bank (Vietnam) Limited has three branches in Hanoi, HCM City and Binh Duong, three transaction offices in Hanoi and four in HCM City. As planned, this year the bank will open extra transaction sites in HCM City, Hanoi, branches in Da Nang, Can Tho and Dong Nai.
HSBC Vietnam has boosted the retail finance service to access closer to consumers. Notably, the foreign bank introduced 10 new multifunctional ATMs (MFM) in first week of 2010. Each branch and transaction office of HSBC Vietnam was equipped with a MFM to help customers sent directly the dong to their accounts at HSBC.
Lyndsay Rajah, Country director of Personal Financial Services HSBC Bank (Vietnam) Ltd said that her bank is committed to provide international standardised creative products and personal services to Vietnamese customers.
Also, through the cooperation deal signed in May 2008 with Techcombank, HSBC's customers can conduct transactions free of charge at Techcombank's 564 ATMs nationwide.
Previously, HSBC Vietnam cooperated successfully with Vietnam Post Corp (VNPOST) to supply HSBC's banking services to 1,600 post offices in the home country.
Thus, Vietnamese banking system will have to continue countering tensely with foreign banks, which requires higher administration capacity.
Dr Le Tham Duong, head of HCM City Banking University's Business Administration Faculty said that in short term; the banking restructure must be implemented continuously to upgrade the competitive strength of local lenders.
Additionally, domestic banks should limit investment in high risky fields, establish a credit policy with clear content, and create their own products.
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