Increased pressure on domestic banks comes from foreign rivals
Foreign banks are increasing their presence in Vietnam through various forms by establishing 100% foreign-owned banks or opening branches. With advantages of capital and services, once the Trans-Pacific Partnership takes effect, foreign banks will have more advantages in Vietnam. Meanwhile, domestic banks that are still undergoing restructuring, lack financial resources and are weak in technology and administration, are under pressure. The State Bank of Vietnam has issued a written notice of approval in principle, allowing Woori Bank to establish a 100% foreign owned bank in Vietnam. If it is licensed, this will be the seventh bank with 100% foreign capital in Vietnam. In March 2016, the central bank licensed the establishment of 100% foreign-owned bank for Public Perhad Bank in Vietnam to take effect from April 1 with the name MTV Public Vietnam Limited Bank,1 with charter capital of VND3,000 billion and a duration of 99 years.
