CIMB Bank, the best retail bank in Malaysia in 2017, revealed its strategy to tap in Vietnam’s market through the model of digital banking – a new trend for future retail banking, and consumer finance. 

Meanwhile, other foreign banks such as Hong Leong Bank, Shinhan Bank, Woori Bank, CIMB Bank, UOB, Public Bank Berhand, among others, are pushing forward with strategy for retail banking in Vietnam. 

Shin Dong Min, CEO of Shinhan Bank Vietnam, said the bank’s target is to enter the top three credit card providers in Vietnam over the next three years. 

In early 2018, Shinhan Card, a subsidiary of Korea’s Shinhan Financial Group has reached an agreement to acquire Prudential Vietnam Finance Company for US$150.8 million.

Similarly, Woori Bank also aimed to become one of the top foreign banks in Vietnam’s market. The bank has recently announced an increase in charter capital from VND3 trillion (US$12.66 million) to VND4.6 trillion (US$195.4 million), becoming the second largest wholly foreign-owned bank in Vietnam just behind HSBC by capital.

Additionally, UOB plans to acquire a major shares of local credit institution to enhance its competitiveness. The move is in line with its parent bank’ strategy, which focuses on Asia, especially Vietnam’s market. 

The combined profit of 13 out of 17 listed banks operating in Vietnam stood at VND31 trillion (US$1.33 billion) in the first six months of 2018, up 66% year-on-year. 

On the list, major state-run Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) posted the highest pre-tax profit of VND7.7 trillion (US$331.62 million) during the period, up 52.7% year-on-year. 

Other banks such as Asia Commercial Bank (ACB), Ho Chi Minh City Development JSC Bank (HDBank) and Tien Phong Bank (TPBank) also recorded an increase of two or three-fold in profit. 

A similarity among those banks is the focus on the retail banking and financial services, which contributed to a positive business performance of the banking sector in the first half of 2018. 

In the case of Vietcombank, the lender has been gradually shifting its investment focus away from wholesale and towards the retail sector, investment banking and expanding the customer base. 

The move resulted in Vietcombank’s credit growth rate of 11% in the January – June period, of which retail credit grew by over 16%. 

Meanwhile, TPBank brought in VND244 billion (US$10.5 million) in revenue from its services, three times higher than the same period of last year, and that of HDBank increased nearly three-fold year-on-year. 

Deputy Finance Minister Vu Thi Mai said the country has set target of completing e-finance services by 2025, which are based on the platform of modern digital finance backed by open data and digital finance ecosystem.

By that time, the finance sector will play the role of facilitator, connecting and sharing of data and digital services, meeting demands for public finance transactions and accessing digital information of the government, citizens and enterprises, stated Mai at a conference on September 26.