Foreign banks, especially from ASEAN member countries, are strengthening there presence in Vietnam as the 94-million-people country, a fertile land for retail banking, continues to one of the fastest-growing economies in Asia.

Public Bank Vietnam (PBVN), a wholly-owned unit of Malaysia’s Public Bank, has just received State Bank of Vietnam (SBV) approval to open another three branches and two transaction offices in Vietnam, expanding its footprint to 18.

PBVN increased the number of its branches to 13 last year, from seven in 2016, since it became a subsidiary in April 2016.

Among the new facilities, the three branches will be located in the central coastal city of Danang, Hanoi, Ho Chi Minh City each, while both transaction offices in Ho Chi Minh City.

At Public Bank Bhd’s annual general meeting in Kuala Lumpur this April, Public Bank group managing director/chief executive officer, Tan Sri Tay Ah Lek, was quoted as saying: “There has always been an on-going plan to expand the bank’s branch network and customer reach in Vietnam. PBVN will continue to adopt our strategy and prudent banking practices to further drive its growth in the retail banking sector.”

He added PBVN would continue to face keen market competition and challenges in building its pool of human resources based on the current operating environment.

This June, just a few weeks before the SBV nod to PBVN, the regulator allowed Korea’s Woori Bank it to open another five branches and one transaction office in Vietnam. The branches will be in Thai Nguyen, Ha Nam, and Hai Phong in the north, and Dong Nai and Binh Duong in the south. The transaction office will be established in Ho Chi Minh City branch.

Woori Bank is one of the nine wholly owned foreign banks in Vietnam, with its licence for operations in the country granted in 2016. The others are Shinhan also from Korea, HSBC, ANZ, Standard Chartered, Citibank, Singapore’s United Overseas Bank (UOB), Hong Leong Bank, and CIMB, with the two latters from Malaysia like Public Bank.

With a limited population and an over-banked domestic market, Singaporean banks see Vietnam as a fresh banking hinterland. UOB received its in-principle foreign-owned subsidiary bank licence in Vietnam in 2017. This allows UOB to broaden and deepen its support for businesses and consumers in the country. UOB is the first Singapore bank to receive the in-principle licence.

UOB is working on extending its branch network beyond Ho Chi Minh City and to offer its products and financial solutions to businesses and consumers located in other cities in Vietnam. It will considers opening a branch in Hanoi, the capital.

Also in 2017, Shinhan Bank acquired ANZ Bank Vietnam’s retail division. It opened four more branches recently, building up its network to 30 branches.

Analysts said the presence in Vietnam of more foreign banks offers more alternatives to the market and has made the banking sector more competitive by ushering in improved management and greater transparency. The reason is the foreign banks entering Vietnam bring with them advanced systems and growing expertise in financial technology. They are also exporting their softer skills in training and advising on the development of regulatory infrastructure.

In the 2017-18 period, Vietnam has seen banks making headlines for their internal restructuring as well as for their market image, human resources, business strategy, and merger and acquisition.

On June 8 2018, the International Monetary Fund’s (IMF) Executive Board concluded the Article IV Consultation with Vietnam. As part of the conclusion, the IMF said Vietnam’s strong economic momentum is expected to continue in 2018, aided by the reform drive, higher potential output, the global recovery, and commitment to macroeconomic and financial stability.