“Vietnam Is Key Pillar of UOB Regional Network”

Recently, Vietnam has seen a growth in strategic partnership between local banks and foreign banks. According to Mr Thng Tien Tat, Regional Manager of Vietnam and Myanmar of United Overseas Bank (UOB), this helps local banks to enhance both their image and expand their services. The foreign banks can also tap the network of local banks to expand their reach. Vietnam Business Forum has an interview with him on UOB activities and Vietnam banking sector’s difficulties.

UOB is now a strategic shareholder of Southern Bank, could you please reveal the role of UOB at Southern Bank?

I think that there are various areas where strategic partnerships can add value. These areas include staff training, providing guidance in risk management, corporate governance and consultation on infrastructure technology.

We have one board representative in Southern Bank. UOB’s current role is to assist the bank in the area of staff training for both technical and non-technical positions. Last year, UOB invited a team of trainers from Southern Bank to Singapore to attend a course on customer service. UOB customised the course for this group of Southern Bank employees. This year, we have also arranged various courses for the bank. These include a legal seminar on mortgage issues, a sales and marketing course, as well as a credit assessment course. We understand that through these courses, Southern Bank employees are now better equipped to serve customers, thus enhancing its image.

UOB is also working together with Southern Bank to look into how best to harness technology to facilitate the implementation of a more effective electronic banking solution, network and system.

From a business perspective, UOB will assist by sharing the necessary know-how and work together with Southern Bank to expand its services to securities companies in Vietnam.

Could you please share some valuable contributions of UOB to the development of banking and financial sector in Vietnam?

UOB is a leading bank in Singapore with an international network of more than 500 offices in 18 countries covering the Asia-Pacific region, Western Europe and North America. UOB started its operations in Vietnam in 1995 with the opening of a branch in Ho Chi Minh City.

In Vietnam, through the offering of diversified products and services, UOB is able to cater to the financial need of different market segments and industries, including State-owned Enterprises (SOEs), Small and Medium-sized Enterprises (SME) and individuals. The Bank has participated in numerous syndicated loans to SOEs for major infrastructure projects, provided equipment, factory and trade loan facilities to SMEs, as well as consumer loans such as vehicle loans to individuals. Though the current economic condition has resulted in a slowdown in growth across many industries, we believe there are still opportunities for the Bank to continue working with established SMEs with good business models.

In 2008, we upgraded our retail system to cater to the needs of our customers. With the full system fully-integrated in 2009, we have been able to add more services for our retail customers. We are also the first foreign bank to join Vietnam Bank Card (VNBC), a domestic network which allows retail customers to access about 1500 ATMs across Vietnam once the Bank starts issuing ATM cards.

What is UOB’s goal in the next five years?

We view Vietnam as a key pillar of our regional network. After all, UOB is the first Singapore bank to establish a presence in Vietnam. As a committed long-term player, we have been steadily stepping up activities and contributing to the development of the Vietnamese financial industry over the last 14 years. We hope to expand beyond our existing foreign branch in Ho Chi Minh City and play a significant role in attracting foreign investments to Vietnam. In order to do this, we need to upgrade our license from a foreign bank branch to a 100 percent foreign-owned subsidiary bank.

We believe that UOB will be able to play a significant role in providing capital market access to Vietnamese companies. On top of that, with a strong regional network, we have the expertise and experience to help customers penetrate the other key international markets.

How can we make a good banking system? What are the current challenges for the Vietnamese banking sector?

The banking system should complement both the economic and social development of a country.  The regulator, banks and even customers play an important role in maintaining a stable banking system.

Like all developing countries, there are still many challenges facing the Vietnam banking sector. There are currently more than 80 banks, including both local and foreign banks, in the country. A consolidation process may help strengthen the financial sector as it faces the liquidity pressure resulting from the global economic turmoil. Another big challenge for the banking industry is the availability of human resources. With new banks opening and existing banks expanding their networks, many positions will need to be filled. At the same time, other sectors such as fund management and the securities market are also employing staff from the banking sector. Thus, retaining experienced staff will be a big challenge for banks.

Posted by VBN on Nov 11 2009. Filed under Enterprises. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry