UOB to expand into Vietnam
(26 July 2017 – Vietnam) Singapore's United Overseas Bank (UOB) has received the go-ahead to set up its first wholly owned Vietnamese subsidiary, targeting the retail sector and local businesses as well as foreign investors.
The State Bank of Vietnam central bank approved a license for UOB Vietnam, along with personnel for its board, supervisors and general director.
UOB Vietnam will start out at an old branch in the southern economic hub of Ho Chi Minh City. A branch in Hanoi, the capital, will follow later.
UOB is the first Singaporean bank to receive an in-principle license to operate as a foreign-owned subsidiary bank. This is expected to enable the city-state's third-largest lender to expand its branch network in Vietnam and offer business advisory, financial solutions, cash management and project financing to customers here.
The bank will extend financial support and offer best-in-class products and service to consumers and businesses beyond Ho Chi Minh City, UOB Deputy Chairman and CEO Wee Ee Cheong said.
When Singaporean Prime Minister Lee Hsien Loong visited Vietnam in March, local media quoted Wee as saying UOB would assist more Vietnamese businesses in their domestic growth and expansion plans by connecting them to cross-border opportunities via UOB's extensive regional network.
UOB set up a dedicated foreign direct investment advisory unit in Vietnam back in 2013 to offer what the bank describes as "seamless and integrated services to its clients expanding their businesses within the country and across borders." This marked its ninth such unit in the region, after ones in China, Hong Kong, India, Indonesia, Malaysia, Myanmar, Singapore and Thailand.
UOB has arranged more than US$3 billion (A$3.79 billion) in foreign direct investment from Asia to Vietnam in sectors including construction, real estate, manufacturing and fast-moving consumer goods. It also signed a memorandum of understanding with the Foreign Investment Agency two years ago to facilitate trade and investment between Vietnam and Southeast Asia.
Eight wholly foreign-owned banks were approved from 2008 to last year to operate in Vietnam, including Standard Chartered Vietnam, HSBC, Australia and New Zealand Banking Group, Hong Leong Bank Vietnam, Shinhan Bank Vietnam, Public Bank Vietnam, CIMB Vietnam and Woori Bank.
But foreign financial institutions still face difficulties doing business in Vietnam, leading them to scale down operations or retreat altogether.