Vietnam

HSBC Vietnam two new insurance products as part of its partnership with Bao Viet to provide policyholders with a range of flexible plans to protect their life and properties. Sumit Dutta, chief executive officer of HSBC Vietnam, said that their group is teaming up with its partners Baoviet Insurance and Baoviet Life to launch the two new insurance products after three years of close cooperation. The bank described the Whole Life Universal Life Insurance and Home Insurance products as budget-suited covers and comprehensive and flexible financial solutions for policyholders. “These are the results of our latest endeavors to bring an all-round financial solution to our customers to enable them to be well protected and to look after their loved ones,” Dutta said. Provided by Baoviet Life, the Whole Life Universal Life Insurance guarantees an annual minimum interest rate of 5% for at least the first 20 years. It allows policyholders to change the sum insured and the premium payment method, choose to pay the premiums for a certain number of years only or until a certain age, and increase or decrease the premium amount in midstream. Meanwhile, the Home Insurance has benefits in two optional sections for home building and home contents integrated in one policy to enable policyholders to choose their way to protect their properties, either as a home owner or a tenant. More importantly, the product allows customers to select a suitable plan to insure their contents without having to list out every single item in the house.

Vietnam will develop credit card payment services with the aim of reducing the quantity of cash in circulation to 11 percent by 2015. It will also strive to increase the number of bank account holders to 35-40 percent of the population. The targets were set in a Prime Minister-approved project to accelerate non-cash payment services. To meet the targets, the banking system will diversify card payment services, with a primary focus on developing pay points. It aims to install 250,000 card payment machines to increase the number of transactions to 200 million a year by 2015.

Vietnam's BIDV raised nearly 1.58 trillion dong or $75 million) from the country's largest initial public offering in 2011.

MB Bank became the fourth Vietnamese bank operating in Cambodia and brings the total number of the kingdom's commercial banks to 31.

Sacombank and Credit Suisse Singapore Limited on Tuesday signed a memorandum of understanding to promote cooperation in banking services.

Ficombank, Tin Nghia Bank and Saigon Commercial Joint Stock Bank passed a resolution to name the joint merger bank as ‘Saigon Commercial Bank’.

BIDV lowered interest rates for exporters, agricultural producers and small companies by 0.5 percentage points starting December 19.

Vietnamese banks are indeed looking to foreign investors for capital support.

ABBank reported a pretax profit of VND391.3 billion or $18.6 million in the first eleven months of the year.

Ficombank, Ting Nghia Bank and Saigon Commercial Bank have received approval to merge.

BIDV will officially make its initial public offering on December 28, 2011.

BIDV will provide a package of preferential loans worth VND5 trillion or US$240 million to boost exports in select sectors.

Techcombank will use a long-term loan from the German Investment and Development Company to assist small and medium-sized businesses in Vietnam.

The State Bank of Viet Nam eased restrictions on lending to the real-estate and some other non-production sectors. A recent central bank decision requires lenders to ensure credit at reasonable interest rates to secure social welfare and stabilise the economy. It lifts a virtual ban on lending to property and housing projects that the SBV had imposed last March by mandating that commercial banks' outstanding loans to non-production sectors should not exceed 16 per cent of total loans by year-end. But the figure remained stubbornly stuck at above 16 per cent since property developers were unable to repay their loans due to the market slump. The new decision removes the bulk of the property sector from the list of non-production sectors. Banks can again freely lend to developers building apartments for low-income people and workers in industrial, economic and processing zones. Another category they can lend to is housing projects that will be completed before 2012. Besides, individuals can obtain mortgages based on their wages to buy or upgrade houses. Analysts say this is mainly aimed at enabling banks to achieve the 16 per cent ratio.

It was not a viable plan to carry out mergers among weak commercial banks, according to the deputy chairman of Vietnam's National Finance Supervision Committee. In order to strengthen a weak bank, it was essential to have sufficient funds to clear the bank’s bad debts, Le Xuan Nghia,said, adding that M&A between banks with financial weaknesses and liquidity shortage would make things worse as they obviously lacked funds to wipe out bad debts and already lost trust from depositors. As a result, Nghia suggested that financially-healthy commercial banks acquire weak ones and vice versa, weak banks should voluntarily seek to merge with large lenders. Through their M&A with small banks, big banks could take advantage of small banks’ operational network as well as customer base and enjoy future profitable opportunities as shareholders can sell their stock to foreign investors after the weak banks recover. Besides, experts worried that the actual bad debts in the whole banking sector were much higher than the publicized figures. Nghia commented on the issue, saying that Vietnam has been classifying bad debts differently from international standards.

ABBank aims to keep its bad debts ratio below 3% until the end 2011.