Saturday, November 10, 2007

Vietnam's banking competition spurred on by WTO accession

Banking operation has made positive progress since Vietnam joined the World Trade Organisation (WTO) one year ago, according to Vu Viet Ngoan, Vice Chairman of the National Assembly’s Economic Committee.

The sector’s upward trend will continue in the next few years, he added.

The entry of foreign banks in the domestic market in line with the country’s WTO commitments has positive impact on Vietnam ’s financial institutions, Ngoan, who used to be General Director of the Vietnam Foreign Trade Bank, affirmed while responding to a Vietnam News Agency reporter on the sidelines of the second session of the 12 th NA.

With a population of 85 million and 6 million of them are account holders, Vietnam is a potential market for card service, prompting its annual development rate of 50-70 percent, Ngoan said.

Though imposing a hard competitive pressure on local peers, foreign banks have prompted them to change their way of thinking and increase their self-motivation.

To increase competitive edge, local banks are in a fierce race to raise their market shares by joining hands with other domestic or foreign partners.

Such banks as the Bank for Investment and Development of Vietnam and the
Bank for Foreign Trade of Vietnam are expected to become dynamic financial groups.

During the last year, most commercial joint stock banks have had doubled their chartered capital along with operation scale and network expanded.

Modern technology has enabled these banks to take part in an inter-banking e-payment system.