US banks push deals in Vietnamese market

September 19, 2023 | 11:02
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US financial institutions and digital payment innovators are intensifying their capital commitments to the burgeoning Vietnamese market.
US banks push deals in Vietnamese market
US banks push deals in Vietnamese market - documentary photo

Tien Phong Commercial Joint Stock Bank (TPBank) last week announced the signing of a seven-year, $100 million loan from the US Development Finance Corporation (DFC). The announcement was made during the state visit of US President Joe Biden to Hanoi.

This financial injection is designed to benefit a range of beneficiaries in Vietnam, with an emphasis on personal banking clients, micro enterprises, and small- and medium-sized enterprises (SMEs). A notable feature of this initiative is the focus on supporting women with lower incomes and businesses owned or led by women in the country.

Established in 2019 under the Better Utilisation of Investments Leading to Development Act, the DFC primarily seeks to funnel private capital into the developing world.

Do Anh Tu, deputy chairman of TPBank, said, “Embracing digital transformation for sustainable growth has been a consistent direction for TPBank over the past decade. We harness technology to make capital accessible to more customers, offering convenience while ensuring safety and security. I am confident that the credit facility from DFC will significantly enhance our ability to serve our customers, helping foster a resilient and sustainable society.”

Further underlining the robust relations between the US and Vietnam, VPBank and the DFC last week also signed a commitment for a $300 million bilateral loan with a tenure of seven years to bolster VPBank’s capital base, promote sustainable lending, and aid SMEs, especially those steered by women.

Current influences are not only institutional, and the US financial landscape and technological innovations are leaving footprints on Vietnam’s industry pioneers.

MoMo, under the combined prowess of US-educated talent and favourable Vietnamese government policies, has constructed a unique technological platform tailored to Vietnamese financial service needs.

“We ardently hope to continue receiving support from both governments, propelling Vietnam’s digital transformation,” said MoMo deputy chairman and CEO Nguyen Manh Tuong.

Tuong was among 17 people chosen for the Vietnam Education Foundation Scholars programme, sponsored by the US government two decades ago, and his vision for MoMo was inspired by the cashless society he witnessed during his academic stint in the US.

“Today, a majority of MoMo’s leadership are proud alumni of esteemed US institutions such as Harvard, Yale, and Columbia. Simultaneously, our major investors include prominent US financial funds like Warburg Pincus and Goodwaters,” he said.

Beyond direct financial engagement, other US entities are nurturing Vietnam’s move towards a cashless economy.

Firms like Visa and Mastercard have been consolidating ties with domestic banks such as MB, Techcombank, and ACB, while the recent introduction of Apple Pay in Vietnam has underscored the country’s rapid digital progress.

“With the surge in mobile contactless payments across Vietnam, we anticipate a warm embrace of Apple Pay’s convenience and security,” noted Dung Dang, Visa’s country manager for Vietnam and Laos.

The broader aspiration beyond just capital is evident in the rise of innovative services. August saw Citi Vietnam unveiling its Citi Commercial Payment solution, which it says is set to revolutionise payment efficiency, optimising processes for more diverse business needs.

Just over a year ago, Madhu Kannan, Bank of America’s executive vice chair of Global, Corporate, and Investment Banking, held discussions in Ho Chi Minh City regarding its strategic engagement in Vietnam. Despite closing its representative office in the city in 2002, the discussions hinted at a renewed interest in the region, although no official update has been forthcoming.

DFC to grant $100 million loan to TPBank DFC to grant $100 million loan to TPBank

TPBank, one of Vietnam’s leading commercial banks, has announced the signing of a letter of commitment for a $100 million loan with a 7-year term from the US government’s Development Finance Corporation (DFC).

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By Luu Huong

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