DBS Bank, one of the Southeast Asia’s largest banks, last week opened its first branch in Vietnam to meet a growing demand for integrated banking solutions and greater market connectivity by Vietnamese firms.
Peter Seah, chairman of DBS Group Holdings, tells VIR that the Ho Chi Minh City branch marks DBS’ next phase of growth in Vietnam, where the bank has been present since 2008.
Vietnam is said to be undergoing some macroeconomic instability issues such as rising inflation, a deepening trade deficit and an unstable forex market. Why did you decide this challenging time to expand your presence in the country?
This is Asia’s time. Asia’s economy is growing and there are many Asian companies currently investing in Vietnam. More of our clients from all over the world such as Hong Kong, Taiwan, Singapore, UK and Middle East see the opportunities in Vietnam.
That is why we think this is the best time for DBS to set up our presence here to service them as well as bring our experience and connectivity to better them in this region. The opening of this new branch in Vietnam demonstrates DBS’ commitment to helping businesses expand within the country and also across the region.
What is your evaluation on the Vietnamese market and its potential?
Vietnam is increasingly seen as a land of opportunities amid economic reforms and growth. Indeed many companies, including DBS, view Vietnam as an emerging market with excellent prospects.
According to enterprise agency IE Singapore, companies from Singapore and Vietnam have recently signed some $300 million worth of agreements to develop real estate projects here. With the rise of the middle class in Vietnam and Asia powering global economic growth, the future looks bright. In 2009, Singapore was Vietnam’s fifth-largest foreign investor.
As of September 2010, Singapore’s private sector has invested in more than 800 projects worth nearly $18 billion in a wide range of sectors in Vietnam. In a recent Asian Development Bank report, it noted that Vietnam is substantially benefiting from the rebound in world trade, which is projected to continue through 2011.
In particular, trade with China including Hong Kong has stepped up owing to a rebound in those economies reinforced by a free trade agreement that came into effect in January, 2010 between China and the ASEAN.
Such growth will open up numerous business opportunities and spur more intra-Asian trade between Vietnam and other regional economies. DBS with its wide network in northeast, southeast and south Asia, will be able to provide seamless banking service to companies in areas like trade finance, cash management, remittance and capital markets.
Given that DBS has entered Vietnam later than several other foreign giant banks such as HSBC, Standard Chartered or ANZ, do you expect harsh competition?
We are used to operating in environment with competition - Hong Kong, China, India, Taiwan, and Indonesia and even in Singapore. We are confident we can do well here for our customers. We strongly believe this is Asia’s time. Our in-house group research shows that for the first time, Asia’s total consumption exceeds that of the US. Asia is now very attractive.
We choose our business based on our strengths – strong foundation as a development bank in Singapore. Our regional connectivity, our huge liquidity base, our strong shareholding and credit capabilities will help differentiate us from many others. Vietnam is growing, so we will not miss the opportunity to be part of the growth here.
You mean that you have braced for particular key growth strategies for Vietnam’s market so as to strengthen your partnership with the local business community?
While we have a representative office in Hanoi, most of our customers operate out of Ho Chi Minh City. Thus it is ideal for us to have a branch presence here in Ho Chi Minh City where our customers are. Ho Chi Minh City branch will be able to support the financial needs of Singapore and Asia-based corporations with business interests in Vietnam.
These companies will enjoy access to a comprehensive suite of services, which include credit facilities, trade finance, cash management and treasury advisory. We also have a number of Vietnam’s state-owned and large private corporates as our clients.
They include PetroVietnam Drilling. We believe as one of the largest banking groups in Asia, we can add value to our clients businesses in Vietnam as well as in the region. As Vietnamese corporations grow in the region, DBS can leverage on its strong connectivity in Asia and capabilities to help them with their business expansion.