BBL faces Vietnam price war

“We have lost some share of Thai corporations to them [local banks]. However, the bank sometimes has to allow the use of pricing to retain quality customers,” said Tharabodee Serng-Adichaiwit, BBL’s senior vice president and general manager for Vietnam.
Vietnamese banks need to lower their non-performing loan ratios, so they need to boost lending as much as they can, he said.
Vietnamese banks enjoy a lower cost of funds than foreign banks, so they can offer lower fees to customers.
Some Thai corporations doing business in Vietnam have switched to using Vietnamese banks for their credit needs such as project finance.
Normally, local banks will have exposure in consumer products and real estate, which are not the targets of Bangkok Bank. 
However, local banks are now moving to top-tier customers, which are in the crosshairs of Bangkok Bank, as they are quality customers. 
“Therefore, the competition this year is quite serious,” said Tharabodee, who also is manager of the Ho Chi Minh City branch. 
Overall loans so far this year still are short of target, especially at the Ho Chi Minh branch, because of the fierce competition. 
Some customers have also had to spend much time dealing with the complicated regulations for buying land and property.
However, the Hanoi branch has achieved the loan-growth target of 15 per cent after the bank increased the registered capital of the Ho Chi Minh and Hanoi branches to a combined US$250 million (Bt8.8 billion) from $80 million. The Hanoi branch had been unable to lend to some corporate customers because of the single lending limit, but after expanding capital, it can serve demand.
In Vietnam, a bank’s loans to a company cannot exceed 15 per cent of its capital and for a group of companies, the cap is 25 per cent.
Both branches have 40 deals in the pipeline for financing projects, mergers and acquisitions and greenfield projects. Bangkok Bank hopes that half of those deals will be finalised this year.
The bank has room to achieve the growth target of 15 per cent despite the price war in the market.
Vietnam demands investment in electricity to support economic growth, so the energy business is an interesting segment for foreign investors including Thai corporations.
As a developing country with a growing middle class, Vietnam is giving importance to reducing pollution, so renewable energy has become the choice. 
This will be an opportunity for Thai corporations. However, the cost of renewable energy might be unattractive now, Tharabodee said.