Joint Stock Banks Continue to Take Off in 2007

Vietnam’s joint stock commercial banks will continue to see a strong growth amid fierce competition in 2007, said financial experts.

 

Le Dac Son, general director of the Vietnam Bank for Private Enterprises (VPBank), said there will be not a sharp competition soon between the domestic banks and foreign banks. He explained that Vietnamese banks will have five more years to compete their competitiveness following the roadmap to open door for foreign banks.

 

He said that in the short term, the competition will take place between domestic players, especially among joint stock banks, which will increase from current 32 banks to 40 or 45 banks.

 

Personnel shortage will be the key issues of the local banks. Domestic banks will have to compete with both domestic and foreign ones to attract skilled workers. Meanwhile, quality of Vietnamese banking staff remains low.

 

Interest rates may be pushed higher as banks want to take more marker share. Banks will also have to compete with other sectors such as securities and gold market, Son said.

 

Alain Cany, general director of HSBC Vietnam, said Vietnam’s banking market will witness drastic growth this year.

 

With commitments on WTO entry, the competition between banks will be strengthened in order to bring better services to customers.

 

Local banks will expand network and open more branches to boost deposits, he said.

 

For HSBC, the bank will expand network of services, customers and offices in order to meet increasing demand of customers. HSBC will also enhance cooperation with Vietnam’s Techcombank to make it the best bank in Vietnam, he said. (New Hanoi)