SCB positive over licence in Vietnam

Siam Commercial Bank (SCB), the country’s third-biggest lender by assets, expects to gain a branch licence in Vietnam this year, says deputy chairman and chief executive Arthid Nanthawithaya.

The move will pave the way for the Thai bank to set up its branch network and offer services throughout Cambodia, Laos, Myanmar and Vietnam.

The bank now has four branches in Cambodia, a branch in the Laotian capital of Vientiane and a presence in Vietnam through the Vinasiam Bank joint venture.

SCB is in the process of acquiring the remaining 67% stake in Vinasiam Bank from the Vietnam Bank for Agriculture and Rural Development and Charoen Pokphand Group.

After the deal is completed and SCB gains the branch licence, the assets of Vinasiam Bank will be transferred to the planned SCB branch in Ho Chi Minh City.

The registered capital of the new branch is expected to be US$75 million, exceeding the Vietnamese central bank’s minimum requirement of $15 million, Mr Arthid said.

Some $100 million worth of assets will be transferred from Vinasiam to the new branch.

Both Thai and foreign banks are heading for Vietnam and neighbouring markets to take advantage of dynamic growth, while the Asean Economic Community, scheduled to kick off at the end of this year, is expected to give a big push to front-tier markets.

SCB is still keen to apply for a foreign bank licence in Myanmar when that country opens the next bidding round, Mr Arthid said.

The bank recently signed trade finance agreements with seven Myanmar banks to support financial services for SCB customers.

“With Myanmar’s fast-developing infrastructure and economic development, funding support from foreign banks may be needed,” he said.

“So the new round of foreign banking licences is expected to open soon,” Mr Arthid added.

SCB has engaged in business in Myanmar since 2003 and set up a representative office in 2012.

The bank applied for a banking licence last year but failed to gain approval.

Among Thai banks, only Bangkok Bank has won a branch licence from Myanmar.

“International banking business will contribute significant long-term revenue amid greater business opportunities in neighbouring markets,” Mr Arthid said.