Foreign banks eye domestic clients

A recent survey made by the United Nations Development Programme (UNDP) and the Ministry of Planning and Investment shows a disappointing result for Vietnamese banks.

42% of companies and 50% of people interviewed responded that they would prefer to borrow from foreign, rather than local banks when the financial market opens. In addition 50% of companies and 62% of people said that they would choose foreign banks to deposit their money. The reason being that foreign banks are more professional, have simple formalities, and more reliable services.

Hong Kong and Shanghai Banking Corporation (HSBC), which often serve big groups and foreign clients, has showed some changes in its business policy. In a recent statement, HSBC Vietnam General Director, Alian Cany, did not try to hide the bank’s ambition in conquering the domestic market. For the past two years, HSBC has successfully developed and marketed its image to Vietnamese companies and managers. As a result, the number of Vietnamese clients of HSBC has increased from 10% to 35%.

Like HSBC, Australia’ s ANZ Bank, Japan’ s UFJ Bank and other foreign banks in Vietnam offer service packages to domestic clients. In early 2005, ANZ signed agreements with some top automobile agents in Vietnam . Accordingly when clients want to borrow money to buy cars, the company suggests ANZ. Similarly, UFJ in HCM City has launched factoring services for exporting companies, aimed at shortening the gap between foreign banks and domestic clients.

After a survey they conducted, the Technology and Investment Consulting Centre (VietBid) stated: “Foreign banks continue to pay attention to specific market shares and State-owned banks will lose many significant clients and their current market shares”. According to VietBid, market shares of State-owned banks by 2010 will be 40-50% compared to over 70% at present.

(Source: Vietnam Net)