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|Head office of Vietcombank Laos in Vientiane. - Photo vneconomy.vn|
Most recently, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) opened its wholly-owned Vietcombank Laos in Vientiane early this week.
Six Vietnamese banks have established a presence in Laos, including Military Bank (MB), Vietcombank, Saigon-Hanoi Bank (SHB), Bank for Investment and Development of Việt Nam (BIDV), Vietnam Bank for Industry and Trade (Vietinbank) and Saigon Thương Tín Bank (Sacombank).
According to Pham Manh Thang, deputy director of Vietcombank, Vietcombank Laos will provide services for Vietnamese businesses looking to invest in Laos, those already operating in the country, as well as others.
Vietcombank also has offices and branches in Paris (France), Moscow (Russia) and Singapore, as well as the Vietnam Finance Company Limited (Vinafico) in Hong Kong. Vietcombank plans to open a branch in Australia and representative office in the US by the end of the year.
BIDV is also pioneering the expansion to foreign markets, with branches and offices in Cambodia, Myanmar, Laos, the Czech Republic, Taiwan and Russia.
Vietinbank has branches in Germany, one representative office in Myanmar and one wholly-owned bank in Laos.
Laos and Cambodia were two top markets for Vietnamese banks, due to significant overseas investment by Vietnamese firms.
Statistics from the Vietnam Foreign Investment Agency under the Ministry of Planning and Investment showed that in the first eight months of this year, the finance and banking sector saw the highest overseas investment by Vietnamese firms with total registered capital of US$105.8 million, accounting for 33.7 per cent of the country’s total overseas investment.
Laos was the top destination for Vietnam’s overseas investment, with registered capital of $95.2 million. Cambodia was also in the top three destinations for Việt Nam’s overseas investment.
Experts said with a number of free trade agreements (FTAs) signed such as the European Union – Vietnam FTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Viet nam’s overseas investment was anticipated to rise significantly, creating opportunities for Vietnamese banks.
Experts also said that besides Vietnamese firms, other companies were also potential customers for Vietnamese banks to increase shares in foreign markets.
Financial and banking expert Can Van Luc said that Vietnamese banks had increased overseas investment for several reasons.
FTAs were opening significant opportunities for businesses investing abroad and this created demand for banks in foreign countries to provide banking services.
In addition, the formation of the ASEAN Economic Community created favourable conditions for Vietnamese banks to invest within the bloc.
Under the banking development strategy to 2025 with a vision to 2030 recently approved by the Prime Minister, Vietnam aims to have at least 2-3 banks in Asia’s top 100 banks by assets and 3-5 banks listed on foreign exchanges.