Many banks in Vietnam are opening new branches to strengthen their market presence as competition among the lenders is no longer focused on interest rates, news website VnExpress reported Satuday.
Asia Commercial Bank, the country’s largest non-state bank, plans to open 66 new branches this year. The lender has forecast pre-tax profit to rise to 5.5 trillion dong (US$264 million) this year from 4.2 trillion dong last year.
“Even though the finance and banking sector in general is facing some difficulties, it’s necessary to expand our network to make our services more accessible to clients around the country,” a VnExpress newswire report cited an unnamed executive as saying.
Viet A Bank also said it targets to have 100 branches by the end of the year, compared to 84 at present. Meanwhile, Dai A Bank has said it will add some 20 branches to expand its network to 100 branches as well.
Vietnam Prosperity Bank, also known as VPBank, said it will use its newly increased capital to strengthen its market presence. The bank, with a registered of more than 5 trillion dong, already has 200 branches.
An unidentified banker in Hanoi said the competition is getting more intense and expanding is the key to survival for banks now.
“The time when banks tried to attract clients with interest rates is now over. Interest rates of different banks have been brought to the same level, so they have to think of new ways to attract deposits,” he said, noting that opening new branches is one of their strategies.
According to VnExpress, the central bank does not restrict commercial banks from expanding their networks. However, it will consider various factors including risk management, bad debt ratios and financial results of banks before allowing them to open new branches.