The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) recently opened its first overseas subsidiary in Vientiane, Laos. (Photo: VNA)

Hanoi (VNA) – Vietnamese commercial banks are racing to develop their networks by opening representative offices and subsidiaries in foreign nations, paving the way for them to expand their overseas operations, according to market watchers.

The most lucrative destinations are Laos and Cambodia which attracted 32 percent of the banks’ total overseas investment of 105.8 million USD in the first nine months of the year. This is understandable as Vietnamese businesses there have proven prospering with billion-USD projects in the fields of accommodation, hydropower, telecommunications, agriculture, mining and real estate.

Recently, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) opened its first overseas subsidiary in Vientiane, Laos.

Located on Lane Xang Avenue, a finance-banking hub in downtown Vientiane, the Vietcombank Laos chapter has a charter capital of 80 million USD, the highest among Vietnamese credit institutions in the country.

According to Deputy General Director of Vietcombank and President of Vietcombank Laos Pham Manh Thang, as the Lao financial market is on its new development phase, it will be a golden opportunity for the bank to offer perfect financial service packages to both Vietnamese investors in Laos and other firms in the host nation.

At first, Vietcombank will capitalise on its network of 40 business customers who are registering 1 billion USD in 46 projects in Laos, then it will expand services to 200 Vietnamese companies in Laos, and Lao businesses and individuals.

Together with Vietcombank, five other commercial banks are running their business in the neighbouring country, namely the Military Commercial Joint Stock Bank (MB), the Sai Gon Hanoi Commercial Joint Stock Bank (SHB), the Joint Stock Bank for Investment and Development (BIDV), the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), and the Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank).

Vietcombank is completing procedures to open a representative office in the US and a branch in Australia. Currently, it has more than 500 branches, representative offices, and member companies in Vietnam and overseas; with over 2,100 agencies established across 131 countries and territories.

The BIDV is a pioneer in landing investment in foreign countries, with subsidiaries and representative offices in six countries and territory of Cambodia, Myanmar, Laos, the Czech Republic, Taiwan (China) and Russia.

Meanwhile, Vietinbank now runs two subsidiaries in Germany, one representative office in Myanmar and a Laos-based branch.

Vietnamese investments outside the border are expected to surge following the imminent signing of a line-up of free trade agreements (FTAs) like the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. In such context, Vietnamese commercial banks must take actions if they do not want to lose their market shares.

Can Van Luc, a banking and finance expert, said that commercial banks have enhanced overseas investments to take advantage of the upcoming FTAs, and integration commitments of the ASEAN Economic Community (AEC).

At present, most of commercial banks’ services only serve Vietnamese investors in foreign countries, and they have not reached other groups of enterprises operating in the host nations yet. However, this is a significant step, which helps Vietnamese enterprises gain a foothold in new markets.

According to a development strategy of the banking sector by 2025 with vision until 2030 recently approved by the Prime Minister, Vietnam will have at least two banks in the top 100 Asian banks in terms of assets, and three to five listed in foreign countries.-VNA