UOB celebrates the official opening of its Vietnam subsidiary. This comes slightly after one year of receiving a bank licence from the State Bank. finews.asia looks at the bank's milestones in the country.
«The opening of our local subsidiary marks a milestone for UOB in Vietnam. Over the last 20 years, we have been steadfast in our commitment to support Vietnam’s economic growth as we connect our clients to investment opportunities in the country,» Wee Ee Cheong, chief executive of UOB, said last week, when the Singapore bank held a gala dinner for more than 300 guests.
Guests for the gala dinner included representatives from the State Bank of Vietnam and the Ministry of Planning and Investment, and Singapore’s Ambassador to the Socialist Republic of Vietnam.
Early Foray into Vietnam
UOB was the first Singapore bank to establish a branch in Vietnam back in 1995. Located in Ho Chi Minh City, the bank initially hopes to use this branch to support its regional clients venturing into the country.
Seeing the 20 percent growth in business flows between Vietnam and Asia between the first half of 2012 and the first half of 2013, UOB decided to step up support for Vietnamese companies on the ground. In September 2013, the bank set up a dedicated foreign direct investments (FDI) Advisory Unit in Vietnam, offering integrated services to its clients looking to expand domestically, or beyond.
Awaiting Its Bank Licence
«Vietnam has prospered from steady economic growth over the last decade and we have seen many of our customers develop from small businesses to companies that are ready to spread their wings to the rest of Asia,» said UOB Vietnam Executive Director, Thng Tien Tat.
In March 2017, UOB announced that it received preliminary approval from the State Bank of Vietnam to establish a foreign-owned bank in the country, as reported by «finews.asia». It was in July 2017 that UOB confirmed that it has received in-principle foreign-owned subsidiary bank (FOSB) licence from State Bank of Vietnam. The FOSB licence enables the bank to extend its branch network beyond Ho Chin Minh City and to offer its products and financial solutions to businesses and consumers located in other cities.
Facilitating FDI
Based on 2017 figures from the bank's annual report, UOB's loans were predominantly from Singapore (S$128 million), Greater China (S$32 million) and Malaysia (S$27 million). Vietnam was not disclosed separately, but likely to be grouped under Others (S$23 million).
(UOB Vietnam’s CEO Harry Loh and VSIP JV’s Deputy General Director Anthony Tan sign an MOU)
UOB has taken several steps to facilitate foreign direct investments into Vietnam over the years. The most recent move was the signing of a Memorandum of Understanding (MOU) with Vietnam-Singapore Industrial Park (VSIP) on Friday, a few days after launching its subsidiary in Vietnam.
First collaboration With a Bank
Back in April 2015, UOB and Vietnam’s Foreign Investment Agency (FIA) had signed a MOU aimed at increasing foreign direct investments (FDI) and trade between Vietnam and Southeast Asia.
The MOU was Vietnam FIA’s first such collaboration with a bank. The FIA is the designated agency under Vietnam’s Ministry of Planning and Investment that supports FDI into Vietnam and Vietnamese companies venturing overseas.
Beyond Banking Products
Besides offering traditional banking products and services, UIOB decided to work with Vietnam's largest co-working space provider to support its smaller clients. In October last year, UOB signed a MOU with Toong to provide its small- and medium-sized enterprise (SME) customers preferential lease rates at any of Toong’s five co-working office spaces in Vietnam.
Under the MOU, UOB customers will enjoy up to 20 per cent off their lease at any of Toong’s co-working spaces spread across Ho Chi Minh City, Hanoi and Da Nang. They will also gain access to Toong’s business partners, including legal and accounting firms, who can advise the bank's customers on various issues.
