Foreigners breach Asia’s final banking frontier
It’s Vietnam, but not as we’ve known it. The country’s financial markets have promised much in the past and delivered little but disappointment. Reforms are now for real and initially most apparent in the banks. Significant opportunities are there for the taking. Chris Leahy reports.
VIETNAM’S STOP-START reform process, taking it from communist state to market economy, has frustrated many international investors. Now, though, the few that have persevered are beginning to benefit. While ANZ and Standard Chartered Bank’s global rivals invested billions to grab a stake in China’s state banks, these pioneers quietly invested millions in minority stakes in two Vietnamese banks. They are the first foreign banks to close deals in Vietnam, and others are following swiftly behind, while more deals are rumoured to be imminent.
“By the time we got serious in other Asian countries, the big boys had carved things up,” says Adil Ahmad, general manager for alliances at ANZ, now based at the head office of Sacombank in Ho Chi Minh City. “In Vietnam, though, we were early: we signed our memorandum of understanding [with Sacom] in March 2005. We were pursuing Asia Commercial Bank and Sacom, along with Standard Chartered, DBS, Temasek, HSBC, Citigroup and goodness knows who else.”
ANZ’s $27 million investment for 10% of Saigon Thong Tin Commercial Joint Stock Bank (Sacom) closed in October 2005.