ASIA BANKING
Current
Banking Trends We caught up with Mr. Vo Tan Hoang Van, CEO of Sai Gon Joint Stock Commercial Bank (SCB) to discuss bancassurance, current banking trends and the future plans for development. What are the current trends you see taking place in the banking sector in Vietnam? After 5 years of a comprehensive restructuring, thanks to a series of proper and decisive measures from the State regulators and the banks, the restructuring process, up to now, has gained positive results. The acquisition and merger of weak and liquidity-unqualified banks have been on the right track directed by the State Bank of Vietnam to narrow down the total number of banks to 15 – 20 banks in 2020. The restructuring process has basically solved two critical weaknesses - liquidity and asset quality. At the moment, the liquidity of banking system has recovered its stability and safety ratios of banks have meet regulatory requirements. As for the asset quality and bad debt settlement, the State Bank of Vietnam has used a number of solutions, in which, notably is the approval of the purchase of bad debts of banks by the Vietnam Asset Management Company (VAMC). As a result, the bad debt ratio has been positively improved (as of June 2016 stayed low at 2.58% according to the data from the State bank of Vietnam). Besides, the positive macro-economic indicators in the first half of 2016 have been reflected in the business results of commercial banks. In general, the total assets and asset quality of banks have been strengthened, the safety ratios have been ensured and the State bank of Vietnam has outlined a roadmap for the implementation of Basel II standards in the risk management in commercial banks. The application of technological advances becomes a significant move in developing
banking products and services. Given the approach to modern technology in regional and global banking sector, Vietnamese banks have put technological application into their products, services and operation. This has helped to introduce the banking products of more convenience and highest security to a wider base of customers, especially the personal customers an important focus targeted by many banks in the future. Another trend is the continued opening of Vietnamese banking market. The lessening of regulatory limits on the foreign ownership in Vietnamese financial institutions is under consideration to increase the ownership ratio of foreign parties. This is inevitable trend of financial markets in emerging countries, helping make the best use of investment capital, technology, managerial experience and professional workforce of international financial institutions.
SCB has secured to strong partnerships to provide bancassurance services to customers. Can you tell us more about these partnerships and the advantages they offer? Although bancassurance has newly been introduced into Vietnamese market, the partnerships between commercial banks and insurance companies via bancassurance have strongly taken off. Realizing bancassurance as an area of great potential, SCB established strategic partnership with Manulife - a leading insurer - to provide a wide range of banking and insurance services, to cross-sell products and increase the utilities to customers.
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