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||16 November 2009
Korean bank sets up subsidiary in Vietnam
Shinhan Bank, the banking unit of Shinhan Financial Group, said yesterday its new locally-incorporated unit in Vietnam would begin operations today, making it the first Korean lender to run a locally incorporated unit in the Southeast Asian country, Korean daily Joongang Daily reported.
It also makes Shinhan the fifth non-Vietnamese lender to establish a local unit there, after HSBC, Standard Chartered Bank, Australian and New Zealand Banking Corp. and Hong Leong Bank of Malaysia.
The lender, which opened its first Vietnamese branch office in 2000, said yesterday it had made its Ho Chi Minh branch a fully locally incorporated unit 11 months after garnering local regulatory approval to do so in December 2008. Shinhan Bank wholly owns the Vietnamese unit, called Shinhan Vietnam Bank, which has total equity of 109.3 billion won ($94.2 million).
Shinhan said it is pinning its hopes on the vast number of Vietnamese with no access to a bank, and the attendant unexplored business opportunities.
“Only about 10 percent of the total population have banking accounts in Vietnam, so the market has vast growth potential,” the bank said in a statement yesterday. “Rising income and investment are driving more capital inflow into the country, meaning more growth potential for the banking industry.”
It will be the ninth locally incorporated unit abroad for Shinhan, which also has divisions in the United States, China, Germany, Canada, Kazakhstan, Cambodia, Japan and Hong Kong.
“We will beef up services for ethnic Korean communities in the initial phase, but will expand our business model to local Vietnamese companies and retail customers,” the bank said.
A growing number of Korean banks have eyed Southeast Asia, particularly Vietnam and Cambodia, as a place to expand beyond the domestic market. Kookmin Bank, Korea’s largest lender, has also been preparing to establish its own incorporated unit in Vietnam.
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