Vietnamese banks are facing serious competition from foreign banks, which began to establish themselves last year under the 2001 Viet Nam-US Trade Agreement and Viet Nam’s WTO commitments. Foreign banks offer more services, more capital, modern technologies, experienced management, and skilled workers.
A Vietcombank executive reports there are six joint-venture foreign banks with 40 branches in Vietnam, including the Hong Kong Shanghai Banking Corporation (HSBC).
Even so, local banks still had advantages, including lower costs. For example, whereas an ATM card from Vietnam’s Agribank is free, foreign banks charge $8 or more; and Vietcombank requires a minimum balance of less than $3 compared to at least $100 for foreign banks.