Deputy PM calls on S. Korean firms to buy Vietnam’s weak banks

25-Jun-2019 Intellasia | The Saigon Times | 6:02 AM Print This Post

Deputy prime minister Vuong Dinh Hue has called on banks and large groups from South Korea to acquire poor-performing banks in Vietnam, such as Ocean Bank, Global Petroleum Bank (GPBank) and Construction Bank (CBBank).

At a meeting with the leaders of Korean banks, financial companies and Hyundai and Samsung Vietnam in South Korea’s capital of Seoul on June 20, as part of his ongoing visit to South Korea, Hue also called on these banks and firms to purchase shares in Vietnamese financial companies and participate in tenders for the North-South Expressway project, the local media reported.

Leaders of Shinhan Financial Group and Alliex Company expressed interest in cooperating with Vietnam on intermediate payments, noncash payments and peer-to-peer lending. They regarded these fields as important solutions for Vietnam to boost its development in the coming period.

Cho Yong-byoung, chair of Shinhan Financial Group, a leading financial firm in South Korea, also revealed an ambition to become a leading financial group in Vietnam in the near future.

Meanwhile, leaders of Korea Development Bank and Industrial Bank of Korea want to set up branches in the country.

In response, deputy PM Hue said that the Vietnamese government has issued policies to promote new payment methods in Vietnam to minimise the use of cash to save time and costs for individuals and organisations.

Vietnam has chosen June 16 as a day to promote noncash payments. The government has assigned the relevant agencies to build a legal corridor for the use of telecom accounts to make payments without linking them to bank accounts and for the development of digital banking.

As Vietnam is restructuring its financial and banking system, the government will not license the establishment of new foreign-invested banks until the end of 2020, Hue added.

Receiving Hyundai vice Chair Jin Hyng-chung, who is in charge of Hyundai Engineering & Construction, Hue spoke highly of Hyundai’s infrastructure projects in Vietnam and suggested the company prepare to participate in international tenders for the sections of the North-South Expressway project.

On the same day, the deputy prime minister also worked with the Korea Financial Investment Association (KOFIA) and the Federation of Korean Industries.

KOFIA Chair Jo Young-won stated that South Korea is a large investor in Vietnam and that the organisation would help promote cooperation and investment between the two countries.

As of last month, Korean financial companies had invested $3.5 billion in Vietnam, a significant increase over the figure in 2015. At present, 16 financial companies, which are KOFIA’s members, are operating in the securities and construction sectors in Vietnam.

In the near future, some of these firms will sign agreements to provide finances for some enterprises in Vietnam’s Hai Phong City.

Deputy PM Hue said the meeting with Korean firms is a good opportunity to promote the cooperation between Vietnamese and Korean firms.

Hue said that South Korea is now the largest provider of official development assistance loans and the third largest trade partner of Vietnam. There are 1,000 flights between the two countries each month on average, and the number of tourists travelling between the two countries reaches four million per year.

Vietnam boasts a high annual economic growth rate, at 6.8 percent-7 percent, and low inflation. The Vietnamese government has created a healthy investment environment to make the country an attractive destination for foreign investors.

By last year, the local stock market has capitalisation equivalent to 80 percent of the country’s gross domestic product (GDP). If corporate and government bonds were included, the financial market size would exceed 110 percent of Vietnam’s GDP.

In addition, the Securities Law, which is expected to be passed later this year, will ease both foreign direct and indirect investment.

Regarding infrastructure development, deputy PM Hue called on Korean firms to join infrastructure projects in Vietnam as the country needs some $18-20 billion per year for infrastructure development.

During a working session the same day with the Federation of Korean Industries (FKI), Hue said bilateral trade between the two countries reaches $50 billion per year.

Vietnam will ceaselessly improve its business environment and issue preferential policies to attract more foreign investment, especially in ecofriendly and hi-tech projects, Hue remarked.

He also called on Korean firms to invest in renewable energy and traffic infrastructure projects in Vietnam.

FKI Chair Chang Soo-huh said that Vietnam is an important partner of South Korea in its New Southern Policy. percente2 percent80 percent99s-weak-banks.html


Category: Finance, Vietnam

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