Deutsche Bank - Broader Financial Services in Vietnam

Deutsche Bank - Broader Financial Services in Vietnam

Deutsche Bank, founded in 1870, is one of the world’s largest and most prominent financial institutions. With a global network of 1,700 offices, the Group has a strong presence in all major financial centres where it offers a full range of sophisticated banking services. VIB Forum had an interview with Mr. Lawrence J. Wolfe, Chief Country Officer in Vietnam.

Since Deutsche Bank established its presence in Vietnam in 1992, what activities has it performed in Vietnam? 

Deutsche Bank began operating in Vietnam in 1992, and now has 45 staff employed out of its office in Ho Chi Minh City. We have stayed committed to the country throughout all business cycles, and I believe this is one reason why our business has been growing not only in Vietnam, but also in the broader Asia Pacific region, where we operate in 15 countries, and have nearly 6,000 staff employed in over 30 offices.

In Vietnam, we are growing within the broader financial services market. To begin with, our operations were mainly centred on general banking activities. But over the past decade we have seen huge development in Vietnam: the country has become more active on a regional basis; trade has taken off through such agreements such as AFTA; and financial markets have liberalised with the opening of the stock exchange and easing of certain regulations.

With all of these factors our product suite and client base has become more sophisticated. So now Deutsche Bank in Vietnam has range of cash management products for financial institutions and corporates; can conduct assorted foreign exchange and money market transactions; has a securities custody business which allows us to settle daily activities; and is now working very hard - in conjunction with the regulators - at suggesting ways in which the secondary bond market might be strengthened.

How has Deutsche Bank cooperated with German enterprises in business in the Vietnamese market? In your opinion, what advantages and disadvantages have you met with in Vietnam? Do you have any proposals to make to the Vietnamese government in order to facilitate your business in Vietnam?

Deutsche Bank has worked closely with most of the large German enterprises that have invested in Vietnam including many famous names such as Daimler Chrysler, Siemens, Metro Cash & Carry, Triumph and others.

This cooperation has taken many forms such as providing our state-of-the art internet-based electronic banking and cash management services; working capital and project financing; international trade financing and services; foreign exchange; consulting services, etc. Deutsche Bank has always been at the forefront of product development and provides the full array of products and services allowed under local regulations.

As a member of the German Business Association and Eurocham - as well as the Head of the Banking Working Group under the Vietnam Business Forum - Deutsche Bank has represented German and European interests to the government of Vietnam and its regulatory bodies. In addition, Deutsche Bank has provided market information and advice to German companies who are interested in doing business in Vietnam, and to Vietnamese companies wishing to enter the German/European market - thus promoting bilateral trade and investment.

In order to increase the level of German and European investment in Vietnam, there are opportunities for the Vietnamese government to be more visible to German industry as an excellent destination for business investment.

A recent survey of German businesses pointed out that Vietnam was not widely known as an attractive place for German companies to invest and in many cases where Vietnam was known, it was thought of as a vacation spot rather than a place for possible future investment.

I am confident that with Vietnam’s ongoing efforts to join the WTO and to accelerate the pace of its reforms, Vietnam will increasingly be seen as a very attractive country for foreign direct investment.

Deutsche Bank is one of the world’s largest and most prominent financial institutions. What comments can you offer on the Vietnamese financial market? In the near future what are Deutsche Bank and German enterprises going to do to develop your business in Vietnam?

Financial Markets in Vietnam have entered an exciting phase. You only have to look at bare statistics to realise that the climate has been improving. Foreign direct investment increased 14 per cent in 2003 compared to 2002; export growth was up over 19 per cent over the same period; and the stock market was up 50 per cent in the first six months of 2004.

The development of the stock market – opened in 2000 – and its success has set the scene for further financial market development. We think the development of a deeper secondary bond market will be another important step. Development here increases funding options for corporations, will reduce lending pressure on the banking system, and will also stimulate increased interest from international investors.

For Deutsche Bank, future opportunities are there on a number of fronts. Certainly, having global scale does mean that we always are able to offer new solutions – and this is particularly true in cash management and foreign exchange where e-commerce is becoming a key theme. We’ve found that having good technology platforms has served us well in securing new clients throughout the region.

Increased liberalisation of the financial sector will also present good opportunities. Our custody business has for instance benefited from the development of the stock market. Similarly, our foreign exchange and debt businesses have good opportunities in the future.

What do you think about the prospect of cooperation between German and Vietnamese banks in the future?

Cooperation between German and Vietnamese banks is already extensive, however, there is still significant room for growth. Deutsche Bank has been cooperating with the State Bank of Vietnam, all of the State Owned Commercial Banks and some of the bigger Joint Stock Commercial Banks for many years since we opened our representative office in 1992.

Services we are providing include clearing and payment services in foreign currencies such as US Dollars, Euro, British Pounds, etc. You may not have been aware that Deutsche Bank is the world’s largest clearer of Euro payments, the fourth largest in US Dollars and the sixth largest in British Pounds.

Deutsche Bank regularly facilitates international trade transactions for Vietnamese banks by advising and confirming Letters of Credit issued by those banks through our global branch network. Deutsche Bank also cooperates on a daily basis with Vietnamese banks in the local inter-bank market for loans and placements and in clearing of VND payments. We have often introduced business opportunities with foreign companies to local banks in cases where the local banks were well placed to serve our clients. Over the years, we have also provided in-depth training in banking products and services to numerous staff of Vietnamese banks at our head office and branches on a continuous basis, thus contributing to the development of professional banking skills in Vietnam.

Recently we have become active in the local securities market as a custodian bank for foreign institutional investors in local shares and bonds. In addition, we are increasingly acting as a trader in Vietnamese government bonds, where our counterparties are local securities companies which are subsidiaries of the state owned commercial banks. Our cooperation with Vietnamese banks has been a definite "win-win" situation and in the future as Vietnamese banks begin to venture abroad, I am sure that the potential scope for cooperation between Deutsche Bank and Vietnamese banks will continue to grow.

• Reported by Minh Nguyet