Banks target Vietnam’s corporates

Both local and foreign corporate customers are the focus of foreign banks, including Bangkok Bank whose foreign customers in Vietnam account for 50 per cent of its total portfolio.
Tharabodee said that corporates in Vietnam had become stronger because of the bright prospects of the country’s economy.
He said local banks suffered during the last financial crisis due to their large exposure to small and medium-sized enterprises and that was why they had shifted their focus to the corporate sector.
Competition in Vietnam’s banking industry is intense again, he said, adding that the lender in retail banking had also been active in consumer finance because Vietnamese were now more familiar with lending using cash, he said.
When the Vietnam economy is healthy, companies have high profits and they have increased bonuses for top employees, making consumption in the country rise, he added.
Bangkok Bank recently increased its capital from US$85 million (Bt3 billion) to $250 million as its parent bank in Bangkok believes the growing economy in Vietnam offers good opportunities.
With the capital injection, |the bank has set an ambitious |growth target of 18 per cent this |year after missing its loan target last year.
Tharabodee declined to reveal the bank’s loan figure last year.
Under the target of 18 per cent, the bank will focus on giving working capital to corporate customers from Thailand and other countries with a presence in Vietnam, especially China, as there has been an influx of Chinese companies in Vietnam.
“Auto parts is one of our focuses because Chinese auto-makers have expanded to parts assembly plants in Vietnam,” Tharabodee said.
He said there had also been an influx of automakers from Japan into the country. “If the scale of domestic cars in Vietnam reaches 700,000 units, perhaps auto-supply chains will migrate from other countries to this country,” he said.
Last year, Vietnam reported domestic car sales of 250,000 units and this year has targeted sales growth of 30 per cent.
Tharabodee said Bangkok Bank was actively approaching corporates to expand their businesses into the Greater Mekong Sub-region where Bangkok Bank has a footprint.
Vietnamese corporate customers account for 10 per cent of portfolio.
Tharabodee said he and his core team had been in Vietnam more than a decade.
He said the bank offered all-in-one services to foreign companies, adding that many foreign customers did not get big loans because they first wanted to understand the country’s regulations and how to contact subcontractors.
“We believe we can provide |non-lending services to them because our people have been here for a long time, unlike rivals that have faced a high [staff] turnover rate and foreign banks who change managers every three to five years,” he said.