Marketing Topical Research Paper
Global Marketing
Topical Research Paper
Chu Nguyen Binh - DBA Hanoi
NorthCentral University (NCU), USA
National University of Hanoi (Vietnam)
August 2009
Research title: Where would be the market for foreign banks in Vietnam after joining WTO?
ABBREVIATION
BTA Bilateral Trade Agreement CAR Capital Adequacy Ratio FBB Foreign Bank Branch FIB Foreign Invested Bank JSCB Joint Stock Commercial Bank JVB Joint Venture Bank MOF Ministry of Finance NPL Non-Performing Loan SBV State Bank of Vietnam SOCB State Owned Commercial Bank SOE State Owned Enterprise SME Small and Medium-sized Enterprise SSC State Securities Commission WB World Bank WTO World Trade Organization
TABLE OF CONTENTS
ABBREVIATION
ABSTRACT
1. INTRODUCTION 1
2. VIETNAM BANKING SECTOR - A SUMMARY 1
3. CHARACTERISTICS OF THE VIETNAMESE BANKING INDUSTRY 3 3.1. Very Low Market Penetration 3 3.2. Rate of Growth in Both Loans and Deposits Far Exceeding GDP Growth 3 3.3. A Highly Concentrated but Highly Fragmented Banking Market 4 3.4. Heavy Handed Regulation with Restrictions on Foreign Banks 5 3.5. Lack of Transparency Concerning Quality of Lending 6 3.6. Heavily Undercapitalized 7 3.7. Narrow Revenue Base and Few Product Offerings 7 3.8. Unknown Quantity of Non-performing Loans 8
4. BUSINESS ENVIRONMENT FOR THE BANKING SECTOR 9 4.1. The Government’s Strategy 9 4.2. State Bank of Vietnam - Freeing the Tiger 9 4.3. Regulatory Environment - Meeting International Standards 10 4.4. Developing the Capital Markets 11
5. PROSPECTS FOR BANKING SECTOR GOING FORWARD 12 5.1. Non-Performing Loan Ratios to Rise, But Risks of Bank Failures Looms 12 5.2. Further Development Inhibited by Low Capital and Technology 12
6. CONCLUSION 14
Topical Research Paper
Chu Nguyen Binh - DBA Hanoi
NorthCentral University (NCU), USA
National University of Hanoi (Vietnam)
August 2009
Research title: Where would be the market for foreign banks in Vietnam after joining WTO?
ABBREVIATION
BTA Bilateral Trade Agreement CAR Capital Adequacy Ratio FBB Foreign Bank Branch FIB Foreign Invested Bank JSCB Joint Stock Commercial Bank JVB Joint Venture Bank MOF Ministry of Finance NPL Non-Performing Loan SBV State Bank of Vietnam SOCB State Owned Commercial Bank SOE State Owned Enterprise SME Small and Medium-sized Enterprise SSC State Securities Commission WB World Bank WTO World Trade Organization
TABLE OF CONTENTS
ABBREVIATION
ABSTRACT
1. INTRODUCTION 1
2. VIETNAM BANKING SECTOR - A SUMMARY 1
3. CHARACTERISTICS OF THE VIETNAMESE BANKING INDUSTRY 3 3.1. Very Low Market Penetration 3 3.2. Rate of Growth in Both Loans and Deposits Far Exceeding GDP Growth 3 3.3. A Highly Concentrated but Highly Fragmented Banking Market 4 3.4. Heavy Handed Regulation with Restrictions on Foreign Banks 5 3.5. Lack of Transparency Concerning Quality of Lending 6 3.6. Heavily Undercapitalized 7 3.7. Narrow Revenue Base and Few Product Offerings 7 3.8. Unknown Quantity of Non-performing Loans 8
4. BUSINESS ENVIRONMENT FOR THE BANKING SECTOR 9 4.1. The Government’s Strategy 9 4.2. State Bank of Vietnam - Freeing the Tiger 9 4.3. Regulatory Environment - Meeting International Standards 10 4.4. Developing the Capital Markets 11
5. PROSPECTS FOR BANKING SECTOR GOING FORWARD 12 5.1. Non-Performing Loan Ratios to Rise, But Risks of Bank Failures Looms 12 5.2. Further Development Inhibited by Low Capital and Technology 12
6. CONCLUSION 14
References: Johny K. Johansson (2006). GLOBAL MARKETING Foreign Entry, Local Marketing, & Global Management. McGraw-Hill, Fourth Edition, International Edition. ISBN 007-124454-9. Vinacapital. Vietnam Equity Research. August 15, 2006 Fitch Ratings, Vietnam Special Report - Vietnamese Banks: Focus on Asset Quality - Three Stress Scenarios. February 25, 2009 at: www.fitchratings.com Vietnamese Banks: A Home-Made Liquidity Squeeze? May 2008 Jaccar Equity Research, Vietnam. Banks and Financial Services. The Bubbles did not Burst but Turned Grey. May 18, 2009 at www.jaccar.net Fulbright Research Project, The Banking System of Vietnam: Past, Present and Future. Nam Tran Thi Nguyen, 2001. at: www.iie.org/fulbrightweb/BankingPaper_Final.pdf retrieved on 27 Feb 2009.