Industrial Bank of Korea plans to establish locally incorporated entity in Vietnam

Industrial Bank of Korea (IBK) plans to set up a wholly-owned locally incorporated bank in Vietnam, said chairman and CEO Kim Sung-tae.

The executive disclosed the information at a meeting with Vietnam's Deputy Prime Minister Ho Duc Phoc in Hanoi on Tuesday.

Kim expressed his hope that the new entity will make significant contributions to Vietnam’s economic development in the coming years, particularly by supporting small and medium-sized enterprises, engaging in infrastructure projects, and investing in finance.

Currently, there are nine wholly foreign-owned, locally incorporated banks in Vietnam, namely Woori Bank, HSBC, Standard Chartered, ANZ, Hong Leong, Shinhan, Public Bank, CIMB, and UOB Vietnam.

In response, Deputy PM Phoc voiced his support for IBK’s plan, adding that the State Bank of Vietnam is processing the licensing according to prescribed procedures.

He said he hopes that the bank will continue to achieve success and make greater contributions to the Vietnamese economy.

Phoc also expressed his appreciation for South Korea's experience in developing SMEs. He noted that in Vietnam, more than 98% of the over 940,000 operating businesses are SMEs, and the country is implementing measures to promote the sustainable and efficient growth of this sector.

The Deputy PM highlighted positive outcomes of bilateral relations, emphasizing that Vietnam and South Korea have become leading partners across all fields, with investment and trade as key pillars of their ties.

The two sides discussed credit support for SMEs, building linkages between SMEs and large or global corporations, and assisting SMEs in investing in new technology sectors.

Kim shared experience of government-bank cooperation in implementing loan guarantee programs for household businesses to help them recover after the Covid-19 pandemic, as well as providing capital support for SMEs to overcome economic, financial, and monetary crises.

Established by the South Korean government in 1961 with the state holding a 68.5% stake, IBK has a mandate to provide financial support for SMEs, which currently account for 82% of its total outstanding loans.

As of June, the bank had operated 625 branches in South Korea and 60 abroad, including two in Vietnam.