|Singaporean United Overseas Bank seeks to open an 100 per cent invested bank in Viet Nam. — Photo straitstimes.com
HA NOI (VNS) — The Ministry of Planning and Investment (MPI) has recommended the Prime Minister to direct the State Bank of Viet Nam to issue a licence to Singapore's United Overseas Bank (UOB).
The move is aimed at facilitating the opening of a wholly foreign-owned bank in Viet Nam.
In the proposal, the ministry says that Singapore has been among Viet Nam's largest partners, but there is no wholly foreign-owned bank in Viet Nam from that country. However, some other nations and territories, whose investments in Viet Nam have been smaller than that of Singapore, have been allowed to open such banks in the country, the ministry notes.
In 2008, the UOB submitted an application for upgrading its branch in HCM City into a wholly foreign-owned bank in Viet Nam. However, it has not been approved yet.
The ministry has urged the Government to allow the UOB to enlarge its operations in Viet Nam and encourage the bank to take part in the restructuring of Viet Nam's banking system by buying over domestic banks.
With roughly 1,405 projects worth a total registered capital of more than US$33 billion invested in Viet Nam as of March this year, Singapore is Viet Nam's third-largest foreign investor, after South Korea and Japan. Singapore's average investment capital has been $23.75 million per project, much higher than that of other foreign-invested projects in Viet Nam.
At a recent Ministerial Meeting on Viet Nam-Singapore Economic Connectivity, the MPI's Foreign Investment Agency and the UOB contracted a memorandum of understanding on investment promotion to facilitate investments into Viet Nam via the Foreign Direct Investment advisory unit of the UOB in HCM City.
Viet Nam currently has six wholly foreign-owned banks. They are HSBC, Standard Chartered Bank, ANZ, South Korea's Shinhan Bank, Malaysia's Hong Leong Bank Berhad, and Public Bank Berhad.
Other foreign banks have also opened 43 branches and 49 representative offices in Viet Nam.
According to experts, more foreign banks are expected to enter Viet Nam's market, especially after the establishment of the ASEAN Economic Community at the end of this year.
They have recommended that Vietnamese banks must operate on a larger scale, with huge investments in technology and products through consolidations and mergers, to create better and stronger banks that can compete with foreign banks.
By 2020, in accordance with the commitment to the World Trade Organisation, Viet Nam will have to completely open its doors in the banking sector. — VNS