Multifunctional Bank

 

The State Bank of Vietnam has licensed the Vietnam International Bank (VIB Bank) to set up its VIB Securities Co. (VIBS) with a charted capital of VND50 billion (US$3.13 million).

 

VIB Bank is only one of nearly 20 securities companies on the Vietnamese market now, mainly being operated commercial banks. Several other companies are submitting applications for the establishment of their own securities companies, including Vietnam Import-Export Bank (Eximbank) and Vietnam Technological and Commercial Bank (Techcombank).

 

Not only in the securities field, many banks have also expanded into other fields. Saigon Thuong Tin Commercial Bank (Sacombank) has launched two new fields of real estate and financial leasing. Many banks are preparing to open more scopes like overseas remittance and investment fund management.

 

Becoming a multifunctional bank is a new development tendency of Vietnamese commercial banks. According to Ms Bui Thi Mai, General Director of (Habubank), said the business expansion in the financial field will enable a bank itself to intensifying service to its clients because the more an enterprise develops the more demand for financial service it needs.

 

Regarding State-run commercial banks, the multifunctional development has been calculated for a long time. The Bank for Investment and Development of Vietnam (BIDV) and the Bank for Foreign Trade of Vietnam (Vietcombank) are running many fields other banks are following like financial leasing, securities, debt management firm and joint venture bank. Recently, Vietcombank opened a fund management company in the form of joint venture while BIDV acquired the foreign-held stakes in the Vietnam-Australia Insurance Joint Venture to set up its own BIDV Insurance Co. (BIC).

 

Apart from finance-related fields, many banks have begun completely new scopes. According to Mr. Nguyen Hoa Binh, Chairman of Vietcombank, his bank is planning to set up a real estate management company. At present, Vietcombank have spent some VND300 billion (US$18.75 million) in properties but have no company specialising this field.

 

BIDV was the first bank to propose property trust process in compliance with the Vietnamese law. Accordingly, banks will play central roles in housing and office development projects. Mr. Tran Bac Ha, General Director of BIDV, said, in addition to the establishment of supporting services, BIDV also weighed up the set-up of real estate transaction floor in order to help house hunters and combine banking services. Additionally, through its fund management joint venture company, BIDV is planning for the foundation of a real estate investment fund with a capital of US$100 million.

 

However, the expansion to new fields also needs a higher command of professional and human resource management. According to Ms Mai, the rapid expansion needs more complicated management process. For example, the management information and feedback system will multiply; hence, the management will be more complicated. Meanwhile, Mr Ha confessed that the business opportunities are enormous but over-ambition will lead to a serious manpower shortage. The human resource is also a difficult-to-solve lesson for all Vietnamese banks in the international integration process.