CBA provides VIB with impetus to go forward

Vietnam International Bank (VIB) and Commonwealth Bank of Australia (CBA) have announced the Australian bank’s increased stake in VIB from 15 to 20 per cent. Han Ngoc Vu, chairman of VIB’s board of directors, tells VIR’s Song Ngoc the move provides important momentum for both banks to go forward in the marketplace.

How will CBA’s move impact on both banks’ operations in Vietnam?

The increase in stake by our strategic partner CBA – one of the top-ten largest banks in the world by market capitalisation, has reflected its confidence in management capacity of VIB’s leaders, long-term vision of the bank’s stakeholders and VIB’s development potential.

The enhancement of VIB’s financial capacity now is included in VIB’s framework of strategic activities, which are inherent and continuously developing. Since 2010, CBA’s total investment in VIB has amounted to VND3.93 trillion (almost $200 million), including the total surplus of VND2.55 trillion via two contributions comprising VND850 billion in charter capital (equal to 20 per cent of VIB’s), and A$25 million in technical assistance. We will use this surplus for business development plans.

I think besides the capital, the most significant thing we have gained from the increased stake is CBA’s long-term and strong commitment towards VIB during this hard time for Vietnam’s banking sector. After 15 years of development, VIB’s total assets have reached more than VND100 trillion ($5 billion), and VIB has joined the group of leading banks in Vietnam in terms of total assets and some other indicators.

Are there strong reasons for CBA to buy VIB shares at higher than the current market prices?
Those who work in a bank would find it difficult to evaluate the true value of a bank because we believe that we have a good bank and we love it. Thus, it is impossible to gain an accurate answer to the question whether the price is being high or low. From VIB’s point of view, we believe that the evaluation is based on the long-term potentiality, vision, strategies, and faithfulness in the long term and shared goals. As there is a very limited number of shares are transacted, the price in the over the counter (OTC) market does not reflect the true value of a bank or business. Furthermore, CBA has its own very good model for bank evaluation.

CBA has become one of the seven foreign banks holding 20 per cent stakes in local banks. Will this be an advantage for VIB to stay ahead of the pack?

CBA’s increased stake is a significant milestone marking our long-term commitment and tightening partnership. It is a matter of fact that CBA invests in VIB not only through the shared capital, but also a six-year “capability transfer” programme. CBA now has more than 20 foreign experts working for VIB in key fields like retail banking, risk management, IT, financial management, customer satisfaction management and training.

We believe that CBA’s increased stake, together with CBA’s capability transfer programme, and the vigorous transformation progress that we have been implementing at VIB, covering branch network, product procedures, risk management, especially customer service, will help build a solid foundation for VIB to realise our strategic goals and leverage our competitiveness in the banking and financial market.

In the current volatile economy, can you shed some light on VIB’s business achievements during the past 10 months of 2011?

In the first 10 months, a hard time for businesses, VIB has been focusing on the transformation process  in order to deliver the best products and services to our clients. VIB has transformed more than 40 per cent of its branches in accordance with the new sales and service models. Our number of clients increased to one million, staff has increased by 20 per cent to  more than 4,300 working at 150 branches nationwide and the total assets reaching VND100 trillion ($5 billion). More importantly, we have achieved outstanding results in sales, consulting service and business culture.

Is it true that VIB is in a firm position to become a top-five big joint stock bank in Vietnam in the near future?

The issue of strategies is both broad and wide, and we together with the leading consultants from the US’ Boston Consultant Group, outline these strategies in a year. The realisation of such strategies will take years through our implementation of 26 strategic projects. In brief, it is impossible to detail VIB’s strategies in just a few short words. VIB’s orientation is to turn into a world-class financial institution, aiming to be the most innovative and customer centric bank in Vietnam.