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March 13, 2008

ANZ bank to go ahead with expansion

Australia and New Zealand Banking Limited (ANZ) has reaffirmed its commitment to Vietnam despite concerns financial institutions have about the evaporation of global credit, Vietnam News Agency reported.

ANZ would continue to develop more products such as credit cards, mortgages and property lending to further its wholesale business in Vietnam, the bank’s managing director Asia Pacific Alex Thursby told reporters in Hanoi Tuesday.

It would also join major government projects during the next 12-18 months more quickly, he said. He did not give specifics.

The managing director said newly-introduced Vietnam Government macro economic policies had been both a proper and timely response to inflation in an economy that had rapidly expanded in a very short time. So too had been its financial-market intervention.

Vietnam's experiences were similar to those of China and other emerging economies, he said. Western countries had suffered similar pain during the late 1980s and early 1990s.

"Short-term pain but long term gain for sustainable development," he said.

Although the Government's decision last week to allow the State Capital Investment Corporation (SCIC) to buy and sell shares to put a floor under stock prices had been forecast to discourage international investors, the ANZ representative argued that it had been necessary.

The Hong Kong administration had intervened to stabilise the market and allow the stock exchange develop normally when the market plummeted during trading sessions in 1997, he said.

But the intervention should be just sufficient to allow the market to adjust rather than long-term.

State Bank of Vietnam action has included: Extension of the compulsory reserves held by banks; Widening of the trading band for currency exchange; and the raising of key interest rates and the compulsory sale of treasury bills in an effort to curb inflation.

All have helped absorb money supply. ANZ celebrated 15 years in Vietnam on March 11. The bank holds a 40 percent stake in Sacombank and the ANZ Card Company and a 10 percent stake in the Saigon Securities Inc.

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