Viet Nam seeks to restructure its banking industry as part of economic reforms. During a recent visit to Viet Nam, Mark Robinson, the CEO, South and Southeast Asia, of ANZ Banking Group, spoke to Viet Nam News about the bank's plans for Viet Nam and what the country should do to ensure a healthy financial sector.
As an experienced banker who has worked in many markets, what is your view about Viet Nam's economy and banking system?
According to our latest research published on January 13, Viet Nam's 2011 GDP growth moderated to 5.9 per cent from 6.8 per cent in 2010.
The annual slowdown was led by a contraction in the construction sector.
Inflation fell to 18.1 per cent year-on-year in December, from a peak of 23 per cent in August. The trade deficit narrowed and the balance of payments showed a small surplus in 2011. Consequently, the USD-VND rate remained relatively stable in the second half. However, depreciation pressures have not abated.
We think the central bank should ease monetary policies only gradually in 2012. The key aim is to reduce inflation to below 10 per cent while achieving modestly higher real GDP growth of 6-6.5 per cent.
The Vietnamese banking system has been transforming very fast over the past years. However, 2011 was not an easy year for many parts of industry globally as well as in Viet Nam. Banking is no exception.
In Viet Nam we saw some small banks had to merge. However, along with more robust regulations and enforcement of regulations, we should see the industry continue to strengthen overall.
We see a lot of opportunity in Viet Nam and are confident the economy will continue to grow. Viet Nam will benefit from the growth in China and the rest of the Southeast Asian region. Viet Nam remains one of ANZ's key markets as part of its Super Regional Strategy and we are continuing to invest in and grow our ANZ business in Viet Nam.
Restructure of the banking industry is among the country's priorities as part of economic reform. What should Viet Nam do to ensure a healthy financial sector which has been weighed down by toxic loans?
Restructuring is not a ‘one-off' process. It is something that will continue to evolve. The strict enforcement of regulations will support the development of a healthier banking system, where credit will be extended to the sustainable growth industries.
In my opinion, the State Bank of Viet Nam has done an excellent job in monitoring the position and facilitating support where required.
To my mind, the longer term will see more consolidation in this market, meaning mergers and fewer banks. That is very normal. Again it is a reflection of a country which is becoming more relevant in the regional economy that you need to have more bigger banks. Having a smaller number of well-managed, strong banks is better than having too many banks. Over time, in all markets, this state of development tended to see consolidation taking place.
Are Australian financial firms interested in entering the Vietnamese market? How do you think they will fare considering the Vietnamese system?
As part of the nature of business, investors always look at where to invest with low costs and least impact from politically instability. Viet Nam has both.
We recently facilitated a Victoria (Australia) client group visit to Viet Nam to find out about local investment opportunities and business environment. The trip allowed them to connect with potential suppliers and buyers, meet local partners for M&A and joint ventures, and familiarise themselves with Vietnamese culture.
I think investors are very optimistic about Viet Nam.
How would you describe the strategies and goals of ANZ's Super Regional Strategy in Viet Nam and what can Vietnamese businesses benefit from them?
The Super Regional Strategy came in a little over four years ago. Viet Nam will be critical for us to be successful as a super regional bank.
The Vietnamese market is very large, and it is growing. It is one that many of our customers outside of Viet Nam wish to do business in and so it is very important that we are successful here.
We have seen clients like Japan and Taiwan who have renewed their interest in investing in Viet Nam. The country's business conditions and competitiveness are getting better relative to some other countries.
There will be more connectivity as we are bringing offshore clients to Viet Nam and taking Vietnamese clients abroad. — VNS