British banks given access to Vietnam
HSBC and Standard Chartered have become the first foreign banks to be given permission to set up wholly owned subsidiaries in Communist Vietnam, the country’s state bank said yesterday.
The two companies will be allowed to operate as commercial banks for a period of 99 years, according to a statement from the State Bank of Vietnam. The country appears to be making good on a pledge to open its banking sector, made when it joined the World Trade Organisation (WTO) in 2007. Foreign banks have complained that the loosening of banking restrictions in the country was progressing too slowly, but the State Bank of Vietnam’s statement said yesterday’s move reinforced the country’s “strong commitment to the WTO”.
HSBC, will be based in the country’s financial centre Ho Chi Minh City, with $183m (£190m) capital, while Standard Chartered will open in Hanoi, with $61m.
Vietnam, once billed as the next Asian economic powerhouse, has suffered recently from rising inflation and concerns over its currency, the dong.
But the country is ripe for expansion, as just 10 per cent of its 86.5m people have a bank account. Thomas Tobin, CEO of HSBC Vietnam, said: “This is a clear sign of the government’s recognition of the importance of a strong financial sector.”