Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam,

Domestic banks trying to expand abroad
17:19' 02/04/2008 (GMT+7)


VietNamNet Bridge – Two big commercial banks, the Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Industrial and Commercial Bank (Vietincombank), are planning to push up business activities abroad.



Vietincombank has signed an MOU on cooperation with Standard Chartered Bank, under which the two sides will cooperate in payment services, capital mobilisation and investment products. The bank intends to expand its network abroad and open representative offices in the near future.



Meanwhile, BIDV has made a daring move in seeking approval to establish a trade presence unit in the Czech Republic.



Tran Bac Ha, Chairman of BIDV, said that the trade presence unit will be located in Prague, and the bank will use the office as a jumping-off point to expand its market in Eastern Europe.



BIDV has every reason to eye the European market. There are some 50,000 Vietnamese people living in the Czech Republic, 50,000 in Poland, 100,000 in Germany, and 8,000 in Hungary and Slovakia.



Director of the Capital Source Division of BIDV Nguyen Manh said that the name of the trade presence unit is BIDV Europe Finance & Investment, BIDV Europe.



BIDV Europe has the chartered capital of $10mil, 51% of which will be contributed by BIDV, 29% by Epiag Folida Porcelan Cz, a producer of luxurious porcelain products, and 20% by Sportisimo, a distributor of sports products in the Czech Republic.



BIDV Europe will provide the following services: non-bank credit, real estate-related services (trading, leasing, brokering, management), financial consultancy and finance leasing.



In terms of non-bank credit, BIDV will target Vietnamese businesses and individuals that have mortgaged assets in Europe or Vietnam and a demand for capital for trade, investment and real estate purchases.



As for real estate, BIDV Europe will consider investing in real estate projects that promise attractive profit, like trade centres, accommodations for Vietnamese businessmen in Europe.



It is expected that BIDV will have completed necessary procedures in Vietnam for the establishment of the trade unit by the end of May 2008, and completed procedures in the Czech Republic by the end of June before the unit opens there in July 2008.



Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that the activities by Vietincombank and BIDV to expand business abroad are the first steps of the banks’ plans to form global banking groups.



(Source: TBKTVN)