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Updated: Sep 22, 2019

About 70-80 percent of the profit made by foreign banks comes from services, while credit makes up 10-15 percent.

There are 7 wholly-owned foreign banks in Vietnam, namely HSBC, ANZ (Australia), Standard Chartered (UK), Shinhan (South Korea), Hong Leong (Malaysia), Public Bank Berhard (Malaysia) and Woori (South Korea).

Of these, HSBC, which arrived in 1870, is the first foreign bank established here. It is also the first foreign bank which set up a wholly foreign owned bank in Vietnam, in early 2009. 

South Korean Wooi is the latest newcomer which received am operation license two months ago. 

There are also 50 foreign bank branches in Vietnam, and 50 representative offices of foreign banks and joint venture banks.

A report of the State Bank of Vietnam (SBV) showed that joint venture and foreign banks now have total assets of VND800 trillion, stockholder equity of VND126 trillion and charter capital of VND101 trillion. 

Their capital adequacy ratio (CAR) is 33.85 percent, which is 3.5 times higher than that of state-owned commercial banks and 2.5 times higher than the average CAR of the whole banking system.

While the important financial indexes of domestic banks have been increasing slowly or decreasing, the indexes of joint venture and foreign banks have been increasing.

An analyst noted that foreign invested banks do not use short-term capital for medium- and long-term lending, while it is very popular among domestic credit institutions. The proportion is 41.28 percent for joint stock banks and 36.58 percent for state-owned banks.

Regarding the business performance, while domestic banks have to make public quarterly and annual reports, foreign invested banks only submit reports to the watchdog agency. 

The latest updated information showed that the ROE (return on equity) of the banks by the first quarter of 2016 had reached 1.37 percent, the lowest in the banking system. Meanwhile, the ROA (return on asset) had reached 0.2 percent, equal to that of state-owned banks and twice as much as joint stock banks’.

About 70-80 percent of the profit made by foreign banks comes from services, while credit makes up 10-15 percent. Foreign banks have outstanding advantages over domestic banks.

Though there are no official statistics about services for VIP clients, analysts believe that more than 50 percent of VIP clients are foreign invested banks’ clients. 

While foreign banks began providing the service many years ago, domestic banks only paid attention to the service three or four years ago with Techcombank being the pioneer, launching the service in 2012.

Among the best card service providers, ANZ, HSBC and Citibank are the most familiar names.



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