The State Bank of Vietnam has issued Singapore's United Overseas Bank its in-principle foreign-owned subsidiary bank licence.
With a population of almost 93 million and a surging middle class, more foreign banks are expected to enter Vietnam's market.
To date ANZ, Hong Leong, HSBC, ShinHan, Standard Chartered, CIMB, Public Bank Berhad and Woori Bank have opened wholly foreign-owned banks (FOSB) in Vietnam.
A Singapore First
United Overseas Bank (UOB) said in a press release that it will be better positioned to broaden and to deepen its support for businesses and consumers in Vietnam as well as its regional clients investing in the country.
UOB is the first Singapore bank to receive the in-principle licence.
Expanding Hinterland
With a limited population and an over-banked domestic market, Singaporean banks have been pushing hard to expand their banking hinterland and make use of their advanced systems and growing fintech expertise as well as exporting their softer skills in training and regulatory issues.
The FOSB licence will enable UOB to extend its branch network beyond Ho Chi Minh City and to offer its products and financial solutions to businesses and consumers located in other cities.
Cross Border Opportunities
The Bank will also consider opening a branch in Hanoi which is Vietnam’s gateway to fast-developing cities in the north such as Hai Phong, Quang Ninh and Hai Duong.
«With the FOSB licence, UOB will be able to support more Vietnamese companies in their domestic and regional growth by connecting them to cross-border opportunities throughout our extensive network,» said Wee Ee Cheong, deputy chairman and chief executive officer, UOB.
Singapore Inc in Vietnam
The Government of Singapore Investment Corporation (GIC) has a 7.73 percent stake in Vietnam's largest bank Vietcombank.
GIC recently sold a large part of its UBS stake selling 93 million UBS shares worth about 1.5 billion.
