The move aims to encourage local banking mergers.
Reuters reports that Vietnam is aiming to limit or even halt issuing new licenses for the establishment of foreign banks in the country in a bid to encourage takeover of local banks.
“Soon, Vietnam will strictly limit, or may stop issuing new licenses for 100-percent foreign owned banks in the country,” Deputy Prime Minister Vuong Dinh Hue said in a statement.
The move is expected to boost M&A activity in the financial services sector in an effort to strengthen weakened local lenders through consolidation.
Vietnam has so far licensed around 10 wholly-foreign-owned banks, such as HSBC Vietnam, Standard Chartered Vietnam, Hong Leong Vietnam, CIMB Vietnam, according to central bank data. Singapore’s UOB also recently incorporated its fully-owned Vietnamese subsidiary United Overseas Bank (Vietnam) after it has been operating under a branch license since 1995.
Korean lenders like Shinhan Bank and Woori Bank are leading expansion efforts into Vietnam with the goal of opening a combined 10 more branches in the country.
Here’s more from Reuters:
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