Six South Korean banks are waiting for the State Bank of Vietnam’s approval to upgrade and expand their presence in the country.
These include two state-run institutions: the Industrial Bank of Korea (IBK) and the Korea Development Bank (KDB).
The proposed expansions were mentioned in a business meeting Friday between Deputy Prime Minister Le Minh Khai and executives of South Korean banks accompanying South Korean President Yoon Suk Yeol on his ongoing visit to Vietnam.
The Vietnamese Deputy PM congratulated IBK on its performance to date in Vietnam, acknowledging the lender’s recently expanded business activities for Vietnamese SMEs, including funding for renewable energy projects.
“This shows IBK’s strong commitment to supporting the Vietnamese economy,” Khai said.
IBK operates branches in Hanoi and Ho Chi Minh City, and is in the process of setting up a subsidiary in Vietnam, said IBK chairman and CEO Kim Sung-tae. He said that with total assets of about $1.5 billion in, IBK was financing Korean businesses and its partners in the country.
Kim expressed his desire to set up a subsidiary to better fund both Korean businesses in Vietnam and Vietnamese businesses, especially domestic SMEs. He said this project acquired greater importance with Vietnam and South Korea upgrading their relationship to a Comprehensive Strategic Partnership last December.
KDB chairman Kang Seoghoon said his bank focused its Vietnam activities on areas like high-tech development, digital transformation and green energy development in response to global climate change.
Kang said he sees further expansion and deepening of bilateral ties between the two countries; and therefore, KDB is looking to set up a branch in Vietnam in the near future.
Deputy PM Khai said at the meeting that at the Deputy Prime Minister level economic dialogue this March, he had discussed with his South Korean counterpart Choo Kyung Ho the issue of Korean banks’ broader presence in Vietnam.
Vietnam is now home to nine 100% foreign-owned banks and 50 branches of foreign banks, Khai said.
The Vietnamese government encourages foreign financial and banking institutions to join Vietnam’s process of restructuring the banking system to handle “weaker” banks. Priority will be given to foreign banks participating in the process, he added.
South Korea is currently the biggest investor in Vietnam, the second biggest ODA provider, and the third biggest trading partner.
The registered capital of South Korean investment projects in Vietnam has reached $82 billion. Vietnam is the biggest Southeast Asian economic partner of South Korea.