The local bankcard market will officially have one more new member—Phuong Nam Joint Stock Commercial Bank (PNB) that commits to join in November. Together with the issuance of bankcard, Phuong Nam Bank is also undertaking another large project. Like other local banks, a pressure on becoming a modern bank urges and hits PNB leaders’ shoulders.
Truong Ty, chairman of the PNB management board assessed “Although established later and focusing on later modernisation than other local banks, PNB still continually makes big investments in the development of its banking network. The commitment to open wide doors for foreign banks to enter Vietnam by the government is going to come in reality and the pressure on improving the competitive capacity and especially the client demand is getting higher, which force banks to attempt to follow the suit, respectively”.
According to Ty, if banks want to win competitively, they must have real financial power. To prepare for its real showcase, PNB has had to focus on raising capital and developing its network. This strong investment is considered a best measure to expand the operation scope of the bank with the aim to obtain the larger market share. To date, PNB has succeeded in merging small banks and opening branches (about 34 branches and banking transaction booths) in the key economic areas. The banking network expanded has helped the bank operate effectively and profitably to earn nearly four trillion dong this year. It is noteworthy that PNB’s chartered capital is expected to increase to 330 billion dong by the end of this year.
Ty said that PNB will invest US$4 million to develop its banking technologies. This investment plan will comprise the building of the Core Banking system, automatic teller machines system, the local transfer and payment system, the international payment system, the telecommunication infrastructures and so forth.
“In the next banking modernisation stage, PNB will continue to deploy other application software solutions such as Home Banking, internet Banking or the like”, said Ty.
Regarding the investments to the bankcard service and ATM system, at present, PNB has signed a contract to join the bank alliance of Vietcombank. Up to now, 15 banks have officially joined this alliance to develop the common ATM system of the leader—Vietcombank. In addition to issuing the local bankcard scheduled in November, PNB plans to sign a contract to become a subsidiary of Vietcombank in issuing MasterCard by 2005.
Ty said that since founded, PNB’s total assets have been increased 126 times, chartered capital up 26 times, total deposits up 111 times and total outstanding loan balance up 130 times. In addition to the long-term investment to the banking modernisation plan by the bank, PNB have also improved new banking technologies and banking products services over years. For example, in March 2003, PNB had the global payment system called SWIFT to help clients be able to carry out any international payments at its branches.
However, Ty said that PNB will have to face many unforeseen difficulties and competitions once Vietnam integrates in the international and regional economies and offshore banks are allowed to enter en masse by 2007.
Therefore, the PNB management board has set a target in the next years that the bank must further expand its operation scope to reach over one trillion dong in chartered capital and post the deposit growth rate of 30% a year and improve the banking products and services quality to serve potential clients.