HVB Providing Good Banking Services

HVB Providing Good Banking Services

HVB Group is the second largest private banking group in Germany with total assets of around €500 billion by the end of 2003. It has over 2000 branch offices around the world and over 60,000 employees. Beside its core market in Germany and Western Europe, HVB is one of the strongest foreign banks in Central and Eastern Europe. In Asia, the bank has branches in Tokyo, Singapore and Hong Kong and representative offices in a number of countries in North and South Asia. HVB Hanoi office was established in 1996 to support the bank’s customers in doing business with Vietnamese entities. The bank provides correspondent banking products, trade finance, long-term export credits and selected project finance.

A major task of the bank is to accompany German customers on their business endeavours in Vietnam, while also helping Vietnam maximise the benefit from the cooperation with Germany, one of the largest exporters and leading economies of the world. HVB actively contributes to the trade and investment between Vietnam and Germany by providing trade-related banking services and credits, mitigating cross-border risk and providing information, training and technical support to Vietnamese banks, companies and government institutions. Vietnam is one of the most populous and resource-rich countries in South East Asia and hence is considered by HVB as a promising destination for foreign trade and investment. Since the establishment of its presence in Vietnam, HVB’s business has been supported by a stable political environment and sound macro-economic performance, by relatively low labour costs and good growth of GDP and trade over the last decade. Nevertheless, HVB and its customers have met with many challenges caused by a weak and unpredictable legal environment, lack of transparency and an inefficient administrative system. Despite its potential, Vietnam’s economy is relatively small with serious structural problems. Economic growth has been largely dependent on the investment and protection of the State, resulting in high investment and production cost, which in turn negatively affects the banking sector.

Vietnam’s financial market is still in a nascent stage of development. The state-owned commercial banks have made impressive efforts recently to improve their operations and accounting standards. Awareness of independent and commercial orientation and profitability has been strengthened at the commercial banks as well as at the State Bank of Vietnam. HVB, as a traditional correspondent bank of Vietnamese commercial banks, has been making its best efforts to provide training, information and technical assistance in various product fields to Vietnamese commercial banks. However much more has to be done to further strengthen the banking sector, such as increasing the capital base, to improve credit quality and profitability. A rapid and successful reformation of state-owned enterprises is essential for the future health of the banking sector and HVB’s future business in the country.

The prospect of German banks and companies in Vietnam depends on the future ability of the country to reform, in order to sustain appropriate macro-economic performance, to create a more favourable business environment, to achieve efficient state-owned investment and to strengthen local private investment. Encouragement and support from the German government and business community is always extended to such reforms.

• Nguyen Hong Anh, Representative of HVB