M-Service is the leading digital payment company in the Socialist Republic of Vietnam, with a share of over 50percent of Vietnam’s mobile payment market, and operates the MoMo brand, which is used by over 20 million people in Vietnam.

Founded in 2007, the company aims to turn MoMo into a superapp that gives users access to multiple services by putting the use of its more than 50 percent market share. Mizuho invested in Vietcombank — a major bank in Vietnam — in 2011 and its latest investment in M-service. The Japanese bank also aims to become a bigger player in Southeast Asia’s financial sector.

The ASEAN region a parallel economic and population growth, and financial infrastructure of the region is in a stage of development, and financial inclusion has become a social issue. The bank has also built the largest business base within Vietnam’s payment market by pioneering an expansive affiliated merchant network and a wide range of use cases, securing its position as Vietnam’s leading super-app.

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VIB is also one of the leading joint-stock banks in Vietnam. With the vision of being the most innovative and customer-centric bank, VIB has been leading the market in business segments including mortgage loans, auto loans, bancassurance and credit card. According to the bank, it has more than 10,000 employees serving nearly 3 million customers at 165 branches and transaction offices in 27 key provinces/ cities across Vietnam.
During the recently held International Finance Awards, VIB won in the “Best New Card Offering – VIB Online Plus – Vietnam 2021” and “Most Innovative New Credit Card Service – Vietnam 2021” categories. The bank was awarded for its continuous effort for innovation and pioneering in terms of card trends in the country.

The Best New Card Offering: The first card line that integrates credit cards and payment cards in South East Asia
Online Plus 2in1 is a card line that integrates credit cards and payment cards with incentives up to 43 million VND per year for transactions via Grab application. Online Plus 2in1 launching event was considered as a turning point in payment technology for users when all transactions can easily make with one card, one touch and one click. The card automatically connects to the system of major online shopping platforms to accumulate reward points and redeem promotional codes.

Earlier, VIB made a strong impression with its personalisation strategy with unique credit card lines. Typically, Online Plus refunds up to 6 percent of all online spending, Zero Interest Rate offers a lifetime interest-free, Rewards Unlimited collects 5 times more points for shopping needs. The bank has been one of the leading banks in the credit card market with an impressive number of cards issuing and transaction value.

The Most Innovative New Credit Card Service: Online registration for credit card within 30-45 minutes
Along with the launching event of Online Plus 2in1 card, VIB has accelerated the process of online credit limit approval and credit card issuing for all credit card lines. This helps customer approaching to credit card more safe and accessible than ever, especially during the challenging time due to the pandemic.

Presently, customer can easily register VIB credit card at their convenience and receive credit limit approval results up to VND 200 million after 15 -30 minutes. Just 5 seconds after that, customer can receive card information via Mobile Banking app MyVIB and start online payment right away.

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Chief executive officer Nguyen Hoang Phuong told the media, “Be Group understands that ebanking will not simply stop at a new payment method, but it will also encompass a new technology that can be integrated into our everyday lives through essential devices.”

According to Be Group, digital bank Cake will have access to over 10 million customers, nearly a third of the Vietnamese ride-hailing market. Meanwhile, the digital bank claims its online know-your-customer (KYC) system would enable users to utilise digital signatures to verify their transactions.

According to statistics from the National Payment Corporation of Vietnam (NAPAS), online payments in Vietnam has grown by 76 percent between January 25 and mid-March in 2020, amid the lockdown measures introduced to curb the spread of the coronavirus.

Back then, Nguyen Chien Thang, director of the digital banking centre at the Bank for Investment and Development of Vietnam (BIDV), revealed banks are also integrating new technology solutions to better serve their customers during the coronavirus pandemic.

According to local media reports, transaction value through digital channels at Vietnam Prosperity Joint Stock Commercial Bank (VPBank) by the end of the first quarter of 2020 increased by 25 percent, while the number of online transactions increased by 50 percent compared to the same period last year.

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Elsewhere in Southeast Asia, Malaysia’s banks are preparing to offer broader loan deferrals to the tune of $32.8 billion to soften the impact of the Coronavirus pandemic. Malaysian banks will offer six-month deferrals for all individual and SME loans. They will also allow people to convert their credit card debt into three-year term loans.

In Singapore, companies facing liquidation jumped to 287 in 2019, the highest since 2005. The city state also saw 434 individual bankruptcies, the highest since 2004. All of these are expected to lead to an increase in bad loans at Singapore banks including at DBS Group Holdings.

Although the Singapore banks have announced easing of borrowing terms, analysts at Sanford Bernstein were quoted by regional media as saying that non-performing loan ratios for DBS and OCBC could climb to 1.8% this year from 1.5% in 2019. At UOB, the ratio may jump to 1.9% from 1.5%, they said. UOB had earlier said that its bad loan costs are expected to rise more than expected due to the Coronavirus outbreak and the steep fall in oil prices.

The Malaysian banking regulator has allowed Banks to draw down capital conservation buffer of 2.5 percent, operate below minimum liquidity coverage of 100 per cent, and use regulatory reserves, according to the press release.

Meanwhile in Southeast Asia, the Vietnam government has said that several banks have seen their bad debt ratios rise as clients face liquidity challenges due to the Coronavirus outbreak. According to a Vietnam government press release, 14.3 percent of the total lending at 23 credit institutes has been affected by the Coronavirus outbreak.

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• From 2009 to 2010, MSB partnered with the world’s popular consultancy McKinsey to draw out a long-term business strategy.
• In 2015, MSB became one of the largest joint stock commercial banks in Vietnam in terms of charter capital and network following Mekong Development Commercial Joint Stock Bank merger and Vietnam Textile and Garment Finance Company acquisition.
• In 2018, MSB continued to take the lead in the 4.0 technology revolution and became the first bank to apply artificial intelligence to to credit card issuance and  integrate its QR code payment method with Vnpay and Payoo.
• In 2019, MSB changed its brand identity and experience models to become the most reliable and understanding bank for customers — while  achieving high profits in Vietnam.

The bank’s collective strength and pioneering spirit stems from its founding shareholders. MSB has been growing steadily based on the two foundations: 

• Strong financial potential: In 2018, MSB’s total assets reached VND137,768 billion, up 32.07 percent compared to 2015. Its owner’s equity increased to VND13,820 billion and total income reached VND11,144 billion.
• Best risk management capacity and credit model in the market which was evaluated and rated by the  prestigious credit rating agency Moody’s.

According to Moody’s ratings disclosed at the end of March 2019, MSB’s long-term local currency and foreign currency deposit rating has been upgraded to B2. Both indicators including long-term counterparty risk and long-term counterparty risk assessment were raised from B2 to B. Particularly, Moody’s adjusted MSB’s baseline credit assessment from CAA1 to B3.

On June 17, MSB has adopted the Basel II international risk management model. The State Bank of Vietnam allowed MSB to apply Circular 41 regulating  capital adequacy ratio that is applied to banks and foreign bank branches in accordance with Basel II international standards. This establishes a safe, efficient, and transparent operations based on international risk management principles and helps to raise MSB’s position and competitiveness in the market.

• Strong customer base growth: MSB has gained the trust of over 1.8 million retail customers, 45,000 business customers and significant partners, by offering a variety of banking and financial products and services with outstanding benefits. 
• Wide network of branches and transaction offices: MSB has been continuously expanding its operating network to reach the level of top commercial joint stock banks with the largest network in Vietnam: 274 branches and transaction offices, 500 ATMs with a wide coverage in 51/63 provinces.
• Innovative and dynamic team: MSB is proud of being led by a team of professional and experienced senior leaders, including many leading local and regional banking experts. It has a team of nearly 7000 dynamic and professional employees. The bank has been creating competitive advantages with a fair work environment that facilitates creativity and innovation. 

These strengths have built a sustainable foundation that has helped the bank grow at a steady pace over the years. MSB has invested 28 long years in striving to become a bank that ‘everyone wants to join and no one wants to leave’. It is guided by the mission of creating a more convenient and comfortable life  for customers, employees, shareholders and the community. 

The bank’s overall vision has led to a long-term success in creating products, identifying human resources and developing technological systems. This is especially important in understanding what customers need across all engagement channels at all times. 

At its core, MSB focuses on implementing five main values: Responsibility, attentiveness, respect, innovation and efficiency in each activity it engages in to build a professional, friendly, transparent and high-performance corporate culture. And while offering customers outstanding experiences, the bank is committed to adhering to four principles: simplicity, proactivity, interconnectedness and empathy to realise customer satisfaction. 

MSB prides itself on delivering exceptional customer experiences. The bank has been recognised by many prestigious organisations both local and international in this regard. Its 1.8 million retail customers and 45,000 corporate customers — in addition to significant partners and shareholders — is a testament to its long-standing success in Vietnam’s banking industry. 

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The International Finance Banking Awards are presented by International Finance, a premium UK business and finance magazine. The award honours banks for their accomplishments in innovation, infrastructure development, and customer centricity.

OCB is one of the only three Vietnamese lenders to receive the award this year.  The second award it received is a milestone in OCB’s roadmap to achieve the goal of becoming the best digital and modern retail bank for small and medium-sized enterprises in the country by 2020

Established in 1996, OCB offers financial solutions and services to all customer segments. It is focused on expanding its network, improving competitiveness, and strengthening risk management. The bank has been investing in technology and digitising operations for many  years. 

Du Xuan Vu, the bank’s IT director, said, “OCB sees that the adoption of modern technology is an indispensable trend. As part of the development roadmap, the bank will continue to invest in digital technology to design more products and services.” 

OCB OMNI: Innovative digital banking solution

In 2017, OCB began to develop omni-channel which is a cross-channel content strategy that organisations use to improve user experience. One year later, it became the first omni-channel bank in Vietnam. 

The bank launched OCB OMNI platform, digital bank and OMNI PAY in April 2019 — and they have been developed on the most advanced omni-channel foundations in the world.  

OCB OMNI and OMNI PAY offer individuals and enterprises free, rapid, convenient and safe services. Using these platforms, customers can open a new account, get a loan, purchase insurance or invest without visiting the bank branch. 

The two omni-channel platforms also offer customers QR code services, free 24/7 money transfer service within eight seconds and swift payment of electricity, telephone, and internet bills. Customer can access http://go.ocb.com.vn or download the app from the Apple Store or GooglePlay Store to use the service. 

Sanjay Chakrabarty, deputy CEO and head of retail banking at OCB, said, “OCB was one of the first banks in Viet Nam to embark on the digital journey. We were very clear that our digital strategy had to be embedded in our core business. So we didn’t simply go around copying ideas from developed markets and implementing them. We put in a lot of effort to understand where we could harmonise our digital strategy with our ongoing business model, which includes a physical network.”

The launch of OCB OMNI and OMNI PAY is a remarkable achievement for OCB amid the boom in cashless payment in Vietnam. They are a testament to the relentless efforts invested by OCB to introduce better products and services to customers. 

Since the launch, the number of OCB customers using the service has been  increasing sharply. “Our customer service has got the highest ratings from end-users after we automated various process steps and reduced turnaround time for key services,” Chakrabarty said. “Some 90 percent of all new customers we acquire now have at least one online transaction in the first six months. 45 percent of our credit cards are being sold exclusively through digital channels. We have unsecured pre-approved loans that are delivered and fulfilled through digital channels. 

“We are now selling insurance as well as investments through our mobile app OCB OMNI. This has resulted in significant enhancement of customer experience.”

OCB has also tied up with many technology partners to build a robust and safe technology system. In June, OCB announced the successful deployment of the IBM Integrated Analytics System (IIAS). It is the first bank in Vietnam to have deployed IIAS. 

IIAS is a unified hybrid data-management analytics solution providing massive parallel processing. It comprises a high-performance hardware platform and optimised database query engine software that work together to support various data analysis and business-reporting capabilities.

In May, OCB reported that it is collaborating with Dell to run a solution called Software Defined Everything (SDN), which creates a modern, safe and flexible operating system.

Speaking of technology investment, Chakrabarty said: “We understand this is an ongoing journey. We have a company culture where we seek speed and simplicity in everything we do. 

“The key components that sustain this drive are, of course, embracing new technology, the orientation to automate as many manual processes as possible, using the data to understand customer needs at all times and presenting solutions rather than merely selling products, and, finally, empowering customers to make their own choices.”

OCB sees steady development in Vietnam banking

Besides technology, OCB has also focused on steady growth that is evident from its recent accomplishments.

Last year, it was one of the first banks in Vietnam to achieve Basel II norms. Basel II is the second edition of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on banking supervision. Basel II stipulates minimum capital requirements, supervisory review, and market discipline. It seeks to enhance competition and transparency in the banking system and make banks more resistant to market changes.

Moody’s Investors Service has upgraded OCB’s ratings to B1, a significant landmark in the bank’s efforts to improve its financial capacity and risk management. OCB is one of the six banks to buy back all of its bad debts from the Vietnam Asset Management Company.

The bank’s return on assets (ROA) has grown consistently and has always been among the top 10 banks in the country. It has nearly 120 transaction points in all major cities and economic hubs in the country.

OCB has underlined its leading position with more than 10,000 professional staff, a foundation based on modern technology and well-loved brands. For years, the bank has been growing at double the average rate of the industry.

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By the year 2023, the number of card payments in Vietnam are expected to hit 522.5 million.

According to GlobalData’s report, card payments in Vietnam have increased fivefold in the last five years. The reports revealed that while the number of transactions in 2015 was 56 million, it has increased to 271 million in 2019.

Kartik Challa, a payments analyst at GlobalData told the media that, “While Vietnam remains a cash-based society, the government’s financial inclusion initiatives, the emergence of digital-only banks, improved payment infrastructure and the adoption of new payment card technologies have led to the growth of card-based payments.”

The report revealed that the expansion of banking infrastructure in Vietnam and also providing non-banking companies with licences to carry out payment services, especially in rural Vietnam, have contributed heavily to the surge in card payments in the country.

The Vietnamese government has also approved various schemes to bring 70 percent of the country’s adult population under the country’s formal banking system. One of the notable schemes introduced by the government is to encourage digital payments for public services.

Last month, Deputy Prime Minister Vuong Dinh Hue revealed that Vietnam wants to follow the Republic of Korea’s cashless payment model. He also revealed that the Vietnam government has issued regulations on electronic bills, payment through cards and is striving to enable online digital payments for public services.

The post Card payments in Vietnam to reach 522.5 mn by 2023 appeared first on International Finance.

Vietnamese banks also stepped up focus on retail banking in line with the increase in interest in retail banking services as well as keeping up with the policy priorities of the State Bank of Vietnam, the nation’s central bank. Today, most Vietnam banks consider retail banking as an essential part of their development strategy. However, technology integration in retail banking services remains a key challenge for Vietnam banks. Quite a few banks in Vietnam that offer retail banking services lag in data mining and processing, product development, as well as synchronisation of databases and IT infrastructure.

Speaking to International Finance, Rebaca Tan, associate vice president – analyst, Moody’s Investors Services, said that retail lending in Vietnam is relatively young with around a ten-year history. She added that at the end of 2018, the country had an estimated total loan size of around $60 billion which represented about 25 percent of its GDP. Between 2014 and 2018, retail loans had witnessed a rapid growth, registering a compounded annual growth rate of around 59 percent, she added. This, she explained was because of higher incomes and greater penetration of banking services. She has a high opinion of the country’s credit infrastructure. Citing credit bureaus as an example, she said these were evolving with time and had seen good progress in the last few years.

Citibank, the consumer division of American financial services company, Citigroup too said it had seen considerable growth in its Vietnam operations. A Citibank Vietnam company representative told International Finance that it had established the consumer bank in Vietnam in 2009 and had since been developing its momentum and growing its market share in key business areas such as credit cards, personal loans, cash advances, and insurance.

With regard to its cards business, the representative said the introduction of a suite of Citibank PremierMiles World Mastercard, Citibank cash back Visa Platinum card, and Ready Credit, had allowed its credit card customer portfolio to increase substantially, making it the major premium credit card issuer in Vietnam. With regard to loans, the representative said that Citibank Vietnam emphasises on flexibility and convenience of credit management for the customers, by offering cash advance services at ATMs or unsecured loans with competitive interest rates.

Meanwhile, the growth story of South Korea headquartered Shinhan Bank, in Vietnam further accentuates the progress Vietnam has made in developing retail banking. In this regard, Trinh Bang Vu, head of retail and corporate banking at Shinhan Bank Vietnam, told International Finance, “Over the history of nearly 26 years, Shinhan Bank has expanded its network across the country, from the north to the south, with 36 network units nationwide until August 2019. With a wide network of branches and ATMs across Vietnam and a modern ebanking service, Shinhan Bank is serving 1.4 millions of customers by the end of August 2019.”

Challenges to future growth

Moody’s Tan said she believed the future of the banking industry in Vietnam is positive, just like its past, although it came with a few challenges. This, she said could be in the form of increasing competition from new entrants as well as asset quality challenges stemming from rapid growth in previous years.

Meanwhile Shinhan Bank’s Bang Vu specifically mentioned there would be two challenges. “The first challenge is new standards and conditions required for the capacity, organisational structure, and operation of financial institutions to play in the market. The second challenge arises from the business model in the finance and banking industry in Vietnam in the new era,” he said.

With regard to the second challenge, Bang Vu explained that Vietnam was developing in lines with the developed economies in the sense that conventional retail banks would be forced to change in order to survive, as going forward, an increasing number of financial transactions could largely be done through the digital banking applications and platforms.

Technology is key in Vietnam retail banking

Both Tan and Bang Vu said they believed that technology is key and will play an active role in solving some of the challenges. Apart from this, Tan also said that risk management procedures would help. “To address these challenges, good technological and risk management procedures such as scorecards, credit checks, and borrower validation are key.”

Meanwhile, Bang Vu was of the opinion that “..retail banks must strive to strongly invest in technology, cooperate with fintech firms, train human resources, and restructure the business towards the lean, modern, and flexible approach.”

A PwC Retail Banking 2020 report too highlights the importance of technology in the overall retail banking segment going forward. It expects the segment’s landscape to change significantly in response to various factors such as evolving customer expectations, regulatory requirements, and technology among others.

And banks, it said cannot stand to remain the same and had to choose, either to be a shaper of the future, a fast follower, or to manage defensively, putting off change. “We believe that the winners in 2020 will not only execute relentlessly against today’s imperatives, but will also innovate and transform themselves to prepare for the future. This future will require institutions to be agile and open, ready to explore different options in an uncertain world,” the report said.

With regard to role of technology specifically in Vietnam’s retail banking space, Moody’s Tan said, there was a strong potential for fintech development in the country. This, she said was because of Vietnam’s low banking penetration – wherein only one-thirds of adults in the country possessed a bank account. “Together with the increasing use of mobile devices and the internet, fintech could provide tools to improve access to financial and banking services for individuals, especially those in rural areas”.

She further added that because of this potential, Vietnam was witnessing two developments. On the one hand, there was an emergence of several fintech startups especially those offering digital payment services. And on the other, banks in the country were building up their online and mobile banking platforms to enable existing customers handle more transactions online, she explained.

Shinhan bank’s Bang Vu too said that technology would play a key role in Vietnam’s retail banking future considering both the rapid growth of the internet and the non-cash payment policy implementation in the country. “Therefore, the development of digital banks not only meets the needs of the majority of customers but also serves the needs of the banks themselves in expanding the distribution channels, changing the competitive environment and saving its costs,” he said.

Bang Vu added that technology would also bring in various advantages such as enhancing customer experience, retaining and attracting more customers, thanks to mobile banking and internet banking, and also helping improve the security for customers in transaction processing.

Current use of technology in Vietnam retail banking

Suggesting that adoption of technology by retail banks in the country was already underway, Bang Vu said that it had launched an online product last year called the Mobile Banking SOL application. This, he said, came with features that ensured convenience and optimal security for customer transactions.

Bang Vu added that Shinhan Bank Vietnam, as part of its focus towards technology, had partnered with fintech companies such as Momo, Moca, VnPay, Payoo, Zalo, and FPT to introduce digital banking and financial services to meet the diverse needs of its customers. He further said they were seeking more such partnerships in this space through fintech organisations and clubs.

Finally, Bang Vu said his bank was continuing to invest in technology infrastructure. This, he said, included upgrading its core banking system, credit scoring system, customer identification system, data analysis system, and applying new technologies such as big data, AI, Open API, and so on in an effort to build a digital banking ecosystem.

Meanwhile, Citibank too seems to be a frontrunner in the application of technology in its retail banking operations in Vietnam. Speaking on the same, its company representative, said that in an effort to support its digital transformation for customers in Vietnam, it had pushed forward several digital services aimed at improving the digital experiences for retail clients in the country.

“Citi is a leading financial institution to use biometrics technology in Vietnam to enhance customer’s experience, as well as security for its consumers. We introduced Touch ID, a technology that uses finger print to verify customers using mobile banking on the smartphone. Citi also introduced a snap shot feature on mobile banking, provides customers the quick view brief summary of all their accounts with Citi without having to log on. We are also exceptionally proud to be the first bank to introduce voice biometrics technology in Vietnam,” the representative explained.

Other technology achievements according to the representative included, Citi Vietnam becoming the first country globally to accomplish the milestone of 100 percent penetration with clients for e-statements, recording an 82 percent year-on-year growth in downloads of the Citi Mobile App in 2018 and finally Citi’s active app users increased by 47 percent year-on-year.

Government and foreign banks play a key role

So while the future potential for this segment is positive it is also important to note that the government has played a key role in the development of retail banking sector of Vietnam. So when, Moody’s Tan told International Finance that the government was striking a balance between financial inclusion and systemic stability. As an example, Tan said that while the government is pushing towards greater financial inclusion, they are also wary of asset quality issues that could stem from rapid loan growth.

“To this end, the State Bank of Vietnam has recently proposed stricter regulations on unsecured consumer lending for both banks and finance companies which, in our view, are credit positive because it will alleviate asset quality pressure by curbing excessive growth, which will lead to stronger risk-adjusted returns and support internal capital generation in the future,” she said.

Meanwhile, with regard to foreign banks that have till date played an important role in Vietnam’s retail banking space, Tan indicated there was scope for more foreign banks to enter this segment. She said such banks had an opportunity in the form of partnerships with local banks or acquisition of finance companies in Vietnam, or subsidiarisation. She cited the example of Shinhan Card Company that had completed its acquisition of Prudential Vietnam Finance Company Ltd – the fourth largest consumer finance company in Vietnam by assets – in early 2018. She also gave the example of Military Commercial Joint Stock Bank selling 49 percent of its stake in its consumer finance subsidiary to Shinsei Bank in 2017.

Meanwhile, Shinhan Bank’s Bang Vu said that considering there was a huge demand for retail banking in Vietnam but only a limited supply, there was a lot of potential in the country not just for Shinhan Bank but also other foreign banks and investors. He further added that Vietnam’s comparatively better environment further attracted foreign banks. “..demographic structure, stable political and social environment are also important factors in attracting foreign banks to Vietnam, especially when the global financial market become unpredictable,” he explained.

Huge unbanked population promises further growth

Overall, the future outlook for retail banking in Vietnam is positive according to the report by Ant consultants. The report explained that there was a large scope for the development of this segment in the country and the primary reason was that 87 percent of the population were under the age of 54. Citing the State Bank of Vietnam (SBV), the country’s central bank, the report further revealed that while 20 percent of more than 90 million citizens in the country held bank accounts, just three percent of the population possessed a credit card, further highlighting the scope for retail banking in the country.

Moody’s Tan too had similar views. She said loans to the retail segment in Vietnam will continue growing over the next two to three years, buoyed by the country’s young and urbanising population, whose wages were increasing steadily, and because of the increasing use of credit by consumers to make purchases.

The post Vietnam retail banking: Technology is key to success appeared first on International Finance.

The warning was issued after several banks in the country offered this type of loans to customers, a local media report said. However, customers failed to present capital use schemes that is required according to a State Bank of Vietnam circular.

Banking expert Nguyễn Trí Hieu told the local media that, “This form of lending is called ‘phantom loan’ and many developed countries in the world forbid such loans as it could distort total assets of bank.”

Customers who have long-term savings books often request this type of loans because it allows them to maintain their accounts until the maturity date. This way, they will continue to earn high interest rates for the savings — in case they require capital before the maturity date. 

According to the terms of the State Bank of Vietnam, savings accounts that close before the maturity date will receive below 1 percent interest rate, similar to demand savings. For long-term savings, the interest rates are much higher ranging between 7 percent and 8 percent annually depending on the bank. 

The State Bank of Vietnam’s notice clearly stated that local commercial banks not adhering to the rules will face serious consequences. It wants financial institutions in the country to abandon unhealthy practices that might hurt the monetary market in the long run. 

Earlier this month, the central bank announced that the official interest rates will be reduced to 6 percent annually from the current 6.25 percent. It also emphasised on the fact that Vietnam’s inflation rate is under control and the monetary and foreign exchange markets will stabilise. 

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VPBank’s net income reached VNĐ14.4 trillion. Its  operating income in the first six months stood at VNĐ16.8 trillion, with 23.3 percent year-on-year increase, while pre-tax profits was over VNĐ4.3 trillion, up 23.4 percent year-on-year. 

VPBank’s profit growth is largely attributed to the improved processes, reorganised structure, and good labour performance. It is one of the many Vietnamese banks looking for ways to raise capital in international bonds in an effort to meet central bank’s regulations on the minimum capital requirements and other Basel II standards by 2020. The central bank granted an approval to the bank in the first half of the year for the application of Basel II. 

VPBank plans to issue foreign currency bonds worth up to $1.12 billion, likely to be issued under the Euro Medium Term Note Programme. These bonds will be issued to investors by next year and listed on the Singapore Exchange. 

Financial expert Nguyễn Trí Hiếu told local media that banks might benefit from low-interest rates in international markets, but will be on the receiving end of forex fluctuations. “In the context of forex volatility which tends to increase, international bond issuances will face significant risks,” he said. 

The bank has been investing efforts to improve labour productivity coupled with revamping other areas including organisational structure and process. By the end of the year, the bank hopes to clear its bad debts at the Việtnam Asset Management Company, local media reported. 

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