Banking in Vietnam

Last updated

Banking in Vietnam started in 1976 with the State Bank Vietnam, which became the central bank of the country. Vietnam's banks suffer from low public confidence, regulatory and managerial weakness, high levels of non-performing loans (NPL), non-compliance with the Basel capital standards, and the absence of international auditing. Foreign investment limit into national banks of Vietnam is currently set to 30 percent.

Contents

History

Following its reorganization in 1976, the State Bank of Vietnam (formerly the National Bank of Vietnam) became the central bank of the country. In addition to its national financial responsibilities, the State Bank also assumed some of the duties of a commercial bank. It maintained a head office in Hanoi, a division in Ho Chi Minh City, and numerous provincial branches. Other important banks operating in Vietnam in 1988 included the Bank for Industry and Trade (VietinBank - now the largest listed bank) which provides credit to the industry and trade sectors, the Foreign Trade Bank, which was charged with overseeing all aspects of foreign payments, and the Bank for Agricultural Development, which provided loans to agriculture and fishing. [1]

The first solely commercial bank opened in Ho Chi Minh City in July 1987 to handle personal savings and to extend loans to enterprises and individuals. The bank was capitalized with D500 million (US$1.4 million) provided by the government and through stock issues. One objective in establishing Vietnam's first commercial bank was to limit inflation through the bank's ability to coordinate the extension of credit. [1]

To attract more foreign exchange, the Foreign Trade Bank opened an account in 1987 for overseas Vietnamese remittances of foreign currencies to their relatives at home. The currencies dealt with were United States dollars, French francs, Swiss francs, Hong Kong dollars, Canadian dollars, British pounds, Japanese yen, Australian dollars, and Deutsche Mark. In 1987 the bank also agreed to establish a finance company in Tokyo in partnership with a Japanese bank. As the first joint venture between the two countries, the proposed company was intended to help settle bilateral trade accounts, but it was also expected to assist in technology transfers. [1]

Current status

Vietnam's banks suffer from low public confidence, regulatory and managerial weakness, high levels of non-performing loans (NPL), non-compliance with the Basel capital standards, and the absence of international auditing. Since 1992 Vietnam's banking system has consisted of a combination of state-owned, joint-stock, joint-venture, and foreign banks, but the state-owned commercial banks predominate, and they suffer from high levels of NPL, most of them to state-owned enterprises. Consequently, in September 2005 Vietnam decided to equitize all five state-owned banks—a change from previous plans to equitize only two of them. In addition, Vietnam plans to boost the transparency of its financial system by establishing a credit-rating agency and performance standards for joint-stock banks. Large foreign banks are balancing their strong interest in serving multinationals in Vietnam and frustration with continuing restrictions on their activities. Although Vietnam is a cash-based society, there were 12,811 automated teller machines (ATMs) as of January 2012, and 40 million ATM Cards in circulation. [2]

Foreign investment limit into national banks of Vietnam is currently set to 30 percent. The government is working on a law that would include this FDI cap. [3]

Largest banks

Vietnam's top 5 banks by registered capital (as of March 2023, USD/VND exchange rate = 23,590 VND)

  1. VietinBank $1.56 billion (32,661 billion VND)
  2. Agribank $1.39 billion (29,154 billion VND)
  3. Vietcombank $1.10 billion (23,174 billion VND)
  4. BIDV $1.10 billion (23,011 billion VND)
  5. Eximbank $0.59 billion (12,355 billion VND)

Related Research Articles

<span class="mw-page-title-main">Economy of Vietnam</span> National economy of Vietnam

The economy of Vietnam is a mixed socialist-oriented market economy, which is the 36th-largest in the world as measured by nominal gross domestic product (GDP) and 26th-largest in the world as measured by purchasing power parity (PPP) in 2022. Vietnam is a member of the Asia-Pacific Economic Cooperation, the Association of Southeast Asian Nations and the World Trade Organization.

<span class="mw-page-title-main">Bank of China (Hong Kong)</span> Intermediately Chinese state-owned bank in Hong Kong

Bank of China (Hong Kong) Limited (Chinese: 中國銀行(香港)有限公司) also known as its short name Bank of China (Hong Kong) or BOCHK (Chinese: 中銀香港), is a subsidiary of the Bank of China (via a Hong Kong-listed intermediate holding company BOC Hong Kong (Holdings)). Bank of China (Hong Kong) is the second-largest commercial banking group in Hong Kong in terms of assets and customer deposits (2008 data), with more than 190 branches across Hong Kong as of the end of 2019. It is also one of the three commercial banks licensed by the Hong Kong Monetary Authority to issue banknotes for the Hong Kong dollar.

<span class="mw-page-title-main">HSBC (Hong Kong)</span> Hong Kong bank, subsidiary of HSBC

The Hongkong and Shanghai Banking Corporation Limited, commonly known as HSBC, was the parent entity of the multinational HSBC banking group until 1991, and is now its Hong Kong-based Asia-Pacific subsidiary. The largest bank in Hong Kong, HSBC operates branches and offices throughout the Indo-Pacific region and in other countries around the world. It is also one of the three commercial banks licensed by the Hong Kong Monetary Authority to issue banknotes for the Hong Kong dollar.

<span class="mw-page-title-main">Federal Home Loan Banks</span>

The Federal Home Loan Banks are 11 U.S. government-sponsored banks that provide liquidity to the members of financial institutions to support housing finance and community investment.

<span class="mw-page-title-main">Banque du Liban</span> Central bank of Lebanon

Banque du Liban is the central bank of Lebanon. It was established on August 1, 1963, and became fully operational on April 1, 1964. It is currently headed by Riad Salameh.

<span class="mw-page-title-main">Ho Chi Minh City Stock Exchange</span>

Ho Chi Minh Stock Exchange (HOSE), formerly known as HCM Securities Trading Center, is a stock exchange in Ho Chi Minh City, Vietnam. It was established in 1998 under Decision No. 127/1998/QD-TTg of the Prime Minister of Vietnam. HCM Securities Trading Center officially opened on July 20, 2000, and had its first trading session on July 28, 2000, with two listed companies and six security company members.

<span class="mw-page-title-main">Asia Commercial Bank</span>

Asia Commercial Bank, often abbreviated to ACB, is the largest private bank in Vietnam by assets, headquartered at 442 Nguyễn Thị Minh Khai, Ward 5, District 3, Ho Chi Minh City. It was registered on 19 May 1993 and began operations in June 1993. The bank trades at the Ho Chi Minh Stock Exchange under the symbol ACB, where it listed on December 9, 2020 after previously trading at the Hanoi Stock Exchange.

China's banking sector had ¥319.7 trillion RMB in assets at the end of 2020. The "big four/five" state-owned commercial banks are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China, all of which are among the largest banks in the world as of 2018. The Bank of Communications is sometimes included. Other notable big and also the largest banks in the world are China Merchants Bank and Ping An Bank.

VietJet Aviation Joint Stock Company, trading as VietJet Air, is an international low-cost airline from Vietnam. It was the first privately-owned new-age airline to be established in Vietnam, being granted its initial approval to operate by the Vietnamese Minister of Finance in November 2007. As of its launch in December 2011, it became the second private airline to offer domestic service in Vietnam, as well as the fifth airline overall to offer civil domestic flights. VietJet Air is owned by Sovico Holdings, HDBank, other organisational investors, and individual stakeholders.

<span class="mw-page-title-main">PetroVietnam Finance Corporation</span>

PetroVietnam Joinstock Finance Corporation is a non-banking finance corporation, a subsidiary of Vietnam National Oil and Gas Group PetroVietnam.

<span class="mw-page-title-main">Orient Commercial Joint Stock Bank</span> Vietnamese bank

The Orient Commercial Joint Stock Bank is a large bank located in Vietnam. Its Swift code is ORCOVNVX.

<span class="mw-page-title-main">North–South Expressway East (Vietnam)</span> Road in Vietnam

The North–South Expressway East is the most common name of an expressway in Vietnam located very close to National Route 1 an artery, smoothly between the two South and North Vietnam. Similar to National Route 1, the expressway starts from Lạng Sơn and ends at Cà Mau.

Hoang Anh Gia Lai Group, registered as Hoang Anh Gia Lai Joint Stock Company, less formally known by its trading name Hoàng Anh Gia Lai (HAGL), is a diversified company headquartered in Pleiku, Vietnam.

Nguyễn Đức Kiên is a Vietnamese businessman and owner and chairman of the Hanoi ACB football club. In addition he is deputy chairman of the Vietnam Professional Football company (VPF) that now oversees Vietnam’s V-League and First Division football.

<span class="mw-page-title-main">Bao Viet Holdings</span>

Bao Viet is the largest Vietnamese insurance company and Vietnam's seventh largest listed company by market capitalisation. It is state-owned and has a strategic partnership with HSBC, which also holds 18% of Bao Viet's shares. HSBC is, however, soon to be replaced by Sumitomo Life. Besides various insurance products, Bao Viet has diversified into stock market trading, fond management and real estate. It also has subsidiaries in banking, hotels and construction. Bao Viet has been losing market shares in recent years and has also been making losses in the insurance sector since 2009.

Vietinbank is a state-owned Vietnamese bank. It has strategic partnerships with the International Finance Corporation and Mitsubishi UFJ Financial Group. It has a market capitalisation of VND 53.22 trillion as of late 2012, making it one of Vietnam's largest listed companies. According to the VNR500 ranking, Vietinbank is Vietnam's 13th largest company.

Water supply and sanitation in Vietnam is characterized by challenges and achievements. Among the achievements is a substantial increase in access to water supply and sanitation between 1990 and 2010, nearly universal metering, and increased investment in wastewater treatment since 2007. Among the challenges are continued widespread water pollution, poor service quality, low access to improved sanitation in rural areas, poor sustainability of rural water systems, insufficient cost recovery for urban sanitation, and the declining availability of foreign grant and soft loan funding as the Vietnamese economy grows and donors shift to loan financing. The government also promotes increased cost recovery through tariff revenues and has created autonomous water utilities at the provincial level, but the policy has had mixed success as tariff levels remain low and some utilities have engaged in activities outside their mandate.

<span class="mw-page-title-main">Vietcombank</span>

Joint Stock Commercial Bank for Foreign Trade of Vietnam, commonly referred to as Vietcombank, is a commercial bank in Vietnam.

<span class="mw-page-title-main">Public Bank Vietnam</span>

Public Bank Vietnam Limited (PBVN) is a bank based in Hanoi, Vietnam, offering financial services in Vietnam. It was transformed from VID Public Bank (VIDPB) - a joint venture between Bank for Investment and Development of Vietnam (BIDV) of Vietnam and Public Bank Berhad (PBB) of Malaysia with equal stake established in May 1992. The transformation completed on March 24th, 2016 and the bank officially commenced operations on April 1st, 2016.

Vietnam Technological and Commercial Joint Stock Bank, commonly referred to as Techcombank, is a publicly listed Vietnamese bank. Its shares are traded on the Ho Chi Minh City Stock Exchange under ticker TCB.

References

  1. 1 2 3 Vietnam country study. Library of Congress Federal Research Division (December 1987). This article incorporates text from this source, which is in the public domain.
  2. ↑ Archived 2013-11-25 at the Wayback Machine . Saigon Times ATMs overwhelmed by huge crowds (January 2011).
  3. ↑ "Vietnam to allow higher bank investments". Investvine.com. 2013-03-01. Retrieved 2013-03-05.

List of banks in Vietnam

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.