ANZ’s true value as market leader

Vietnam’s domestic banks are facing many challenges, as some of them reported losses due to non-performing loans and some of them have merged with other banks. This causes difficulties for enterprises seeking to mobilise funds. However, foreign banks in Vietnam are still healthy. In this difficult time, what is the role of foreign banks like ANZ Vietnam to the nation’s economy?

All banks, whether foreign or domestic, can go through periods of challenges.  

We have seen some foreign banks that have required government support in the US and Europe.

Fortunately, ANZ was not one of those banks and we navigated the recent financial crises and actually grew during this period. ANZ has navigated many periods of crises over our 177 year history, and I’m sure there will be more crises to come.

The key, to any bank, whether domestic or foreign, is having the financial strength and risk management capabilities to withstand any changes in the environment which could affect the bank or its customers.

Whilst domestic banks are still dominating Vietnam’s banking industry with much larger market share, there are room for knowledge and experience sharing between local and foreign banks. ANZ is keen to play a role, and we have excellent dialogue with state-owned and joint stock banks, including overseas training to help improve the overall health of the system.

We are also the first international bank to apply for membership of the Vietnam Banking Association, as another channel to help learn from and contribute to the sector. At the end of the day, the best contribution ANZ can provide is to run a successful, sustainable and well managed business in Vietnam. This will well help provide competition that other banks will need to work to compete with.

What is the strategy for business expansion of ANZ Vietnam? How will ANZ Vietnam support enterprises to overcome this difficult time?

ANZ Vietnam has a very focused plan on growing its own business. We’ve built up a strong and healthy business over the last 20 years and we continue to do so in the next 20 years or so, this simply means we have a strong commitment to Vietnam. The key areas where we want to be number one at are transaction banking, trade finance and cash management, forex and wealth. In addition, we want to maintain our excellence in Vietnamese dong and US dollar bonds, mortgages and credit cards.

 We will leverage the unique connectivity with Australia, New Zealand and across Asia to support our customers. As you might know, apart from providing better products and services, we are working on connecting customers – bridging them with each other, which is expected to bring them more business to generate new sources of revenue. Annual New Zealand and Australia Trade missions to Vietnam are lively examples. We will continue to facilitate more visits form Vietnam companies to other markets in Asia and also to Australia and New Zealand.

ANZ Banking Group’s super regional strategy has been implemented for a couple of years now. How has ANZ Vietnam employed this strategy to encourage import and export operations between Vietnamese companies and foreign partners in the southern hemisphere?

ANZ has a unique growth strategy that is a super regional strategy. Whilst US and European economies are still sluggishly recovering, Australia, New Zealand and other markets in Asia continue to grow.

Vietnam remains one of ANZ’s key markets as part of its super regional strategy and we are continuing to invest in and grow our ANZ business in Vietnam. Vietnam is a pivotal hub of investment and trade for Greater Mekong region. In December 2011, we took a group of clients from Victoria in Australia to Vietnam to find out about local investment opportunities and business environment. The trip allowed them to connect with potential suppliers and buyers, meet local partners for M&A or joint ventures, and familiarise themselves with Vietnamese culture. 

In April 2012, a group of 17 New Zealand businesses had a week long visit to Vietnam. The trip was facilitated by ANZ team in New Zealand and Vietnam. It was fruitful trip in which New Zealand businesses were provided with in-depth analysis about the market, business environment and culture and most importantly the face-to-face meeting with local firms to explore the chances of collaboration.

In July, ANZ successfully completed an issuance of $5 million performance bond, which enables and supports a Vietnam company to expand its investment to provide services in a completely new market. Three weeks ago, we also hosted some customers in Australia to be part of a workshop. We are active in introducing investors to Vietnam, whilst also introducing regional investment opportunities to Vietnamese companies.

Vietnam is undertaking the restructuring of its banking system. What do you think Vietnam will achieve from this project and what could be the possible difficulties?

Vietnam is not unique. There are many economies that are currently going through a re-structure. The risk is that the clean up of non-performing loans takes too long, and effectively reduces the risk appetite of banks. However, it does seem that banks are taking this seriously, and along with the regulator’s actions, this should result in a healthier banking industry in the years to come.

How do you assess outlook of Vietnam’s economy and Vietnam’s banking system in 2013?

Vietnam has undergone macro stabilisation, with reduced interest rates, inflation and a stable exchange rate.   Maintaining this environment is key to build investor confidence. The biggest risk will be the return of inflation. The banking industry will continue to evolve, and I expect many banks will be trying to fix and reduce their bad debt provisions. At the same time, I still expect plenty of competition in the sector.