Korean lenders have been eagerly expanding their foothold in the country.
A growing number of foreign players are looking to capture the wealth of opportunities in Vietnam’s banking sector with Korean banks taking the charge.
Seoul-based Shinhan Bank is planning to open four more branches in Vietnam, to beef up its network to 30 branches whilst fellow Korean lender Woori Bank is also expanding its foodhold by opening six more branches within the year.
Singapore’s UOB is also turning its sights on Vietnam after it received its in-principle foreign-owned subsidiary bank licence in 2017.
Local banks, on the other hand, have been growing their consumer finance businesses to cash in on a market which could be worth $44b by 2020.
Orient Commercial Bank is mulling the establishment of a wholly-owned subsidiary with $22m (VND500b) charter capital or acquire at least 70% in an existing finance company this year, whilst Southeast Asia Commercial Bank has acquired Posts and Telecommunications Finance Company for nearly $31.3m (VND710b).
The consumer finance market is expected to maintain a healthy growth trajectory in Vietnam as consumer lending continues to climb after rising 65% in 2017 from 50.2% in 2016 whilst the ratio of consumer credit to total outstanding loans in the country's banking system rose from 12.3% in 2016 to 18% in 2017.
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