|Inside an ANZ Vietnam’s transaction office. — Photo baocongthuong.com.vn
HÀ NỘI — The trend of foreign financial institutions withdrawing capital from their Vietnamese joint ventures has raised questions about the country’s state of financial stability, but experts claim the situation is no cause for alarm.
Since early to mid 2017, well known international institutions such as
The trend continued with ANZ’s sale of their retail sector in Việt
The main reason for a number of international banks’ narrowed operations in Việt
Banking expert Nguyễn Trí Hiếu drew a contrast between Western banks and Asian banks. He explained that Asian investors are quite knowledgeable about Việt
Hiếu told the Vietnam News Agency (VNA) that in recent years, many Asian investors from
Talking to the VNA, financial expert Bùi Quang Tín said that a divergence in business strategies is unavoidable when domestic and foreign capital investors work together for a significant length of time.
Tín shared his positive view that in the near future, foreign investors will be able to invest more in local banks, namely Vietcombank, VietinBank or BIDV, once these institutions opt for a more open cooperation policy, especially with Agribank’s imminent equitisation.
He further argued that private commercial banks should expect profit in the following years to rise, while the bad debt ratio is expected to decrease thanks to the National Assembly’s Decree 42 on handling bad credit institutions.
In the same vein, the National Financial Supervisory Commission quoted financial and banking expert Cấn Văn Lực that the national banking system is better than it was a few years ago.
Lực opposed the suggestion that a high level of non-performing loans, lack of risk management and corporate governance have reduced Vietnamese banks’ attractiveness.
“I do not think that the country’s business market is deteriorating, nor is it the reason behind decreasing banks’ profit, as some have commented,” said Lực.
On the contrary, positive factors such as sharply increasing banking stocks, average annual growth rate of 15 to 16 per cent in the financial sector and a more open legal corridor mean Việt
Here to stay
In order to attract and retain investment from foreign banks, the domestic banking system would need to be more flexible, professional and comprehensively re-structured, said Hiếu.
“The national banking system has begun restructuring in recent years, but still not all the way. Only when domestic banks are able to deal with bad debts, replenish their own capital to become healthier, more stable and more attractive, can foreign investors start pouring money in,” he explained.
And yet, ANZ Vietnam’s representative told the VNA that they will not be out of Việt
According to ANZ, the transfer of their retail banking business to Shinhan Bank is part of a strategy to simplify the bank and increase its capital efficiency.
This would hopefully allow ANZ to focus its resources on
ANZ’s representative further said that the bank was committed to continuing its presence in Việt
The bank was optimistic about business opportunities in Việt