South Korean banks are surfing on Vietnam’s wave of Foreign Direct Investment

nsnbc : Following the massive Foreign Direct Investment (FDI) influx from South Korea, the country’s banks are venturing further into the developing financial market of Vietnam.

Shinhan Bank, South Korea, Vietnam, 2018Vietnam’s domestic economy has grown tremendously over the past few years as the country’s ruling communist party regime continues to open up the Vietnamese market and the communist party regime continues the process of opening the country to capitalism and private enterprise.

South Korean direct investment in 2017 was standing at $3.97 billion in registered capital, second only to Japan, according to the General Statistics Office. As a logical consequence, South Korean financial institutions have increasingly gained footholds in Vietnam to cater to the financial needs of foreign direct investment (FDI) businesses and investors.

Nine banks including two local corporations and seven branches or representative offices, five securities firms, two leasing companies, and three finance companies from South Korea have so far joined the local Vietnamese banking and finance landscape.

The past year saw an upturn in the presence and operation of South Korean financial institutions in Vietnam, evident in wholly foreign-owned Shinhan Bank Vietnam acquiring ANZ Vietnam’s retail banking business, KB Securities buying 99.4 per cent of local Maritime Securities Inc., or Shinhan Card and Lotte Card taking over Prudential Vietnam Finance and Techcom Finance Company, respectively.

For these trail-blazing financial institutions, serving the South Korean community is only one of their priorities. Further tapping into the sizeable chunk of 70 per cent of the population that is being described as unbanked or underbanked is definitely another attraction. Shinhan Bank Vietnam, upon its successful takeover of ANZ Vietnam’s retail banking business in 2017, proved its consistent strategy to grow both its corporate and retail arms.

F/AK – nsnbc 07.04.2018

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