HSBC announced on Monday that it has obtained official approval from the State Bank of Vietnam (SBV) to set up a Wholly Foreign Owned Bank (WFOB) in the country, bringing the Bank closer to achieving its goal of becoming the first foreign bank to do so.
Thomas Tobin, CEO of HSBC in Vietnam, explained that:
"We continue to increase our participation in Vietnam's economy and financial markets, and I am very glad to see that our commitment to the development of the financial sector has been recognised and supported by the authorities."
"This is a clear sign of the Government's strong commitment to the WTO and their recognition of the importance of a strong financial sector."
He continued: "We aim to start operating through our new local entity as early as possible and will actively work with authorities to complete the necessary business registration activities in the coming months."
"We hope to become the first foreign bank to operate a fully owned local entity in the fast-growing Vietnamese banking sector and look forward to opening a new chapter in HSBC's history in Vietnam."
Upon local incorporation, the new entity, HSBC Bank (Vietnam) Limited, will be headquartered in Ho Chi Minh City and will be 100% owned by The Hongkong and Shanghai Banking Corporation Limited, the founding and a principal member of the HSBC Group.
The HSBC Group is, at present, one of the world's largest banking and financial services organisations, and in Vietnam, holds 10% of the share capital of Bao Viet Holdings, Vietnam's leading insurer.
It is also in the process of increasing its stake from 14.4% to 20% in Vietnam Technological and Commercial Joint Stock Bank (Techcombank), one of Vietnam's largest joint stock banks, with total assets of VND53tn (USD3bn) at July 2008.
Mr Tobin concluded:
"This is an important milestone in the Bank's 138 years of history in Vietnam. Local incorporation will allow us to have a broader distribution network to reach existing and new customers."
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