South Korea's Shinhan Bank and Malaysia's Hong Leong Bank Bhd will soon open wholly foreign-owned banks in Vietnam to tap a fast-expanding market of 86.5 million people.
The State Bank of Vietnam (SBV) licensed the two foreign banks earlier January as it moves to open up the already-crowded banking sector to foreign competition.
Under the license, Shinhan Bank, a unit of Shinhan Financial Group, will open Shinhan Vietnam Bank with a chartered capital of VND1.67 trillion (US$100 million), the central bank said in a statement.
Hong Leong Bank Bhd, Malaysia's sixth-largest lender, will set up Hong Leong Vietnam with a capital base of VND1 trillion ($60 million).
Both banks will be able to offer the same full banking services as local lenders.
They plan to establish their headquarters in the southern hub of Ho Chi Minh City.
In the past three months the central bank has granted permission to HSBC, Standard Chartered and ANZ to set up banks in Vietnam as part of its WTO commitment to remove restrictions on foreign players in its banking sector.
HSBC Holdings Plc, Europe's largest bank, launched its wholly foreign-owned subsidiary in HCMC on January 5, making it one of the first overseas banks to incorporate here.
More than 40 domestic banks and a dozen foreign banks already operate in Vietnam.
Last year, the number of the locals with a bank account rose 36 percent from 2007 to 15 million, or 17 percent of the population, with 13.4 million automatic teller machine cards now in circulation, according to the SBV.
In a bid to encourage the use of banking services, the Vietnamese government in late 2007 recommended all state companies pay their employees by depositing their salaries directly into bank accounts.
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