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Asiamoney best bank awards 2019: Vietnam


Best Domestic Bank: Vietcombank

Best Bank for SMEs: Vietcombank

Best Corporate & Investment Bank: SSI Securities

Best International Bank: Standard Chartered

Best Digital Bank: Timo/VPBank

Best Bank for CSR: Asia Commercial Bank

Award winners

Best Domestic Bank: Vietcombank

Vietcombank, or the Joint Stock Commercial Bank for Foreign Trade of Vietnam as it is officially named, aims to become Vietnam’s biggest bank by any measure by 2020.

And if Vietcombank continues to enjoy the kind of year it has had, it will be well on the way to achieving that. Even though it has some way to go in terms of assets – at $46 billion, Vietcombank is the smallest of Vietnam’s big four state-owned banks after Agribank ($58 billion), the Bank for Investment and Development of Vietnam ($55 billion), and VietinBank ($50 billion) – Vietcombank leads the way in profit.

In July it reported the highest pre-tax profits of any Vietnamese bank for the first six months of 2019, with earnings of D11.04 trillion ($475 million). That’s an increase of 43.1% on the same period in 2018, and that performance followed a stellar 2018 when annual profits rose 62%.

Vietcombank’s return on assets was 1.4% in 2018, up from 1% the previous year. Return on equity came in at 26.4%, besting the 18.8% of 2017.

Historically, Vietcombank has been the Vietnamese government’s most foreigner-facing bank; it was originally the foreign currency department of the central State Bank of Vietnam. As Vietnam continues its transformation from command to market economy, that outward-looking legacy has won Vietcombank plaudits among its sector peers as the most modern and customer-centric of Vietnam’s state-owned big four.

Vietcombank is a relatively rare corporate creature in Vietnam’s communist-controlled bureaucracy, a largely well-run, customer-focused state-owned company, one with more than eight million account-holders. Those virtues seemed to have appealed to two influential Asian investors. In January, it received a big shot of confidence when Japan’s Mizuho topped up its long-held 15% share and one of Singapore’s sovereign wealth funds, GIC, came onto the register, signing on for a 2.6% stake in the bank.

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Best Bank for SMEs: Vietcombank

As Vietnam’s embrace of the market proceeds apace, the country’s small and medium-sized enterprises sector, the backbone of the economy in most southeast Asian countries, has become a battleground for eager local banks.

Vietcombank is determined to become the country’s leading provider of credit to this expanding market as it eclipses the state-dominated economy.

Companies and SMEs accounted for 45% of Vietcombank’s lending through 2018 and 2019, three times more than in 2011.

Its pursuit of Vietnamese’s SMEs is reflected in the 22% lending growth to the sector it expects this year, compared with the average 15% credit growth across all Vietnamese banks.

With 15,000 employees operating across 500 national outlets, Vietcombank has targeted SMEs by offering cheaper money. In a market where corporate borrowing rates are as high as 9%, it is luring SMEs with 12-month business rates as low as 5.5%, a point under the guideline directive from the central bank.

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Best Corporate & Investment Bank: SSI Securities

Nguyen Ngoc Anh, SSI Securities

Vietnam’s young investment banking industry is still in diapers relative to its more developed, regional neighbours. But when it graduates to greater things, it is likely that SSI Securities will be up there.

Asiamoney seeks to encourage home-grown investment banks in our awards over bigger, more muscular foreign rivals. With that in mind, our local gong goes to SSI Securities, now in its 20th year since foundation and led by managing director Nguyen Ngoc Anh.

In a small field of local players, SSI is a clear leader in deals done, funds raised and profits earned through 2018 and 2019. For the year up to the end of May, SSI’s investment banking division closed deals worth $612 million in Vietnam’s equity and debt capital markets. That helped SSI to earn profits of $56 million for the review period, almost double its nearest rival, VCSC.

Notable deals included a $94 million equity placement for local privately owned bank TPBank, where it was sole adviser. SSI also advised Japan’s Taisho Pharmaceutical in its $150 million purchase, across two separate transactions, of another 25% of Vietnam’s DHG Pharmaceutical to move to control of the local entity. 

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Best International Bank: Standard Chartered

Standard Chartered first opened in Saigon in 1904, and likes to spin that is the longest-standing of international banks in Vietnam. Of course, there was a rather inconvenient – at least for the bank’s boosters – interregnum due to the war that ushered in a unifying communist government. But the bank likes to say it never formally withdrew from here, just that operations were put on hold for a while.

Nirukt Sapru, Standard Chartered

Such inconveniences have been put well into the past and StanChart’s veteran Vietnam country head, Nirukt Sapru, has positioned the bank as the go-to outlet for many of Vietnam’s largest foreign investors, and some large local corporates too.

Sapru claims 60% of Vietnam’s foreign investment funds bank with him, some 85% of local open-ended funds and 50% of funds traded on the local exchange. Sapru points out StanChart’s long-term commitment to the country by noting that the London-based parent increased the capital of its Vietnamese subsidiary by 35% during last year to D4.215 trillion ($182 million).

This year saw StanChart extend its in-country point-of-sale network for its cards to 3,000 outlets by tie-ups with Vietnamese domestic banks. 

The bank also partnered with emerging local fintech Payoo, an e-wallet payment provider, to enable customers to repay card and loan debts through Payoo’s 10,000-strong ‘touch point’ network nationally.

Sipru’s investment banking team also arranged a pioneering bond issue for big local hospital operator Hoan My Medical, a $100 million fund-raising backed by the Asian Development Bank, which was oversubscribed 2.5 times.

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Best Digital Bank: Timo/VPBank

Is Timo an internet café, a bank, a fintech or an air-conditioned respite from Vietnam’s tropical humidity? It seems to be a little bit of each, all part of its appeal. 

Cameron Warden, Timo

It’s also hugely popular among Vietnam’s fast-emerging professional class, particularly its freshly minted urban millennials, who don’t carry the same wariness towards banks or technology as their parents and grandparents.

Three years after launch, Timo’s Canadian chief executive Cameron Warden may be reluctant to divulge how many active users he has, how many times Timo’s app has been downloaded, or any other performance metrics at privately held Timo, but Asiamoney randomly surveyed smartphone-wielding locals in Ho Chi Minh City (HCMC) to see who was using Timo. Of the 25 or so 20- and 30-somethings spoken to in July, about 15 had the app on their phone. Of those, about half said they had cash on deposit and used it regularly to pay for shopping, movie tickets or at the café, or to wing cash to friends and family or pay bills.

Foot traffic through Timo’s branch in HCMC – open from 9am to 7.30pm and one of four outlets in the country that Timo describes as ‘hangouts’ – might be another guide. In four random visits again in July, it was impossible to find a spare seat among the 30-odd being used.

The only physical indication that Timo is about money is the branded ATM at the hangout’s entrance. But it’s all business with the hangout’s waiting staff, who don’t ask you first what drink you would prefer, but how they can help with your account.

Perhaps the telling indicator of Timo’s impact in attracting cash-rich millennials to its app and hangouts are the handful of envious imitators forming among Vietnam’s more staid, state-owned banks, who have struggled to make inroads into the younger market.

Timo doesn’t yet have a formal banking licence – it operates through a relationship with VPBank that does – but when it does, and when the lumbering central State Bank of Vietnam realizes it’s now the 21st century – Timo’s backers of mostly overseas Vietnamese returnee financiers might find they have a winner.

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Best Bank for CSR: Asia Commercial Bank

Corporate and social responsibility isn’t much of a thing among Vietnam banks, at least not how it is conventionally understood or undertaken in other markets.

That’s partly because what others might recognize as CSR practices are supposed to be ideologically inbuilt into Vietnam’s still-socialist system – that business exists to put people over profits.

But as socialist strictures continue to loosen in Vietnam in favour of the market, local banks are being compelled by customers and the state to up their ante on CSR.

Vietnam’s Asia Commercial Bank (ACB) has another reason to step up; its near-death experience in 2012. That’s when its reputation took a battering, because the bank’s founder, tycoon Nguyen Duc Kien, was arrested and jailed for fraud, panicking depositors.

Calm was restored by the central bank and ACB was overhauled to regain investor confidence. Philanthropy was crucial to the remake and today ACB’s “I love the journey of my life” charity programme is key to that image rebuild.

In 2018, ACB allocated over D9 billion ($388,000) to handing out scholarships to thousands of disadvantaged Vietnamese children around the country, up to university age. ACB has also financed new schools across Vietnam.

The Go Paperless project was also implemented in 2018, designed to limit ACB’s impact on the environment. That extends to increasing digitalization, which ACB says is helping its bottom line. ACB also backs the charity Fauna and Flora International, which is dedicated to protecting Vietnam’s rare primate species.

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