Foreign Credit Organisations - Capital Channel and Experience

In the context of Vietnam’s international economic integration, foreign-owned credit organisations are potential rivals for local banks, but they are an important channel of modern banking technology, experience and huge financial sources, which will supplement the rising financial market of Vietnam.

 

According to the State Bank of Vietnam, there are 35 branches of foreign banks, five joint venture banks, four foreign-invested financial leasing companies and one 100 per cent foreign-owned financial company in Vietnam.

 

Over the past years, foreign credit organisations have operated effectively, meeting the demand of foreign investors in Vietnam.

 

With their own advantages and international integration experience, branches of foreign-owned banks have developed and applied modern technology, introducing new products, expanding and diversifying its customer network in Vietnam.

 

Meanwhile, non-banking foreign-owned credit organisations have occupied part of the local market of financial and operation leasing. So far, most foreign-owned financial leasing companies have been profitable.

 

In 2006, branches of foreign banks were thought to be most dynamic, gaining the best development result in financial businesses. By the end of the year, total credit of the branches had reached VND 60,000 billion, up by 20 per cent against 2005.

 

So far, total assets of foreign bank branches and credit organisations have been valued at VND 200,000 billion, up by 50 per cent against 2005. Pre-tax incomes of the sector were estimated at VND 1,700 billion, accounting for 18 per cent of total pre-tax incomes of the whole banking system in Vietnam.