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Home / Economy / Banking & Finance
Japanese SMBC continues participating in Vietnam’s banking reform
Minh Tam 15:45, 2018/03/06
Sumitomo Mitsui Banking Corporation (SMBC), one of the largest and oldest banks in Japan, will continue taking part in the restructuring of Vietnam’s banking system in the coming time.
Shosuke Mori, head of SMBC’s Asia Pacific Division, said during a meet with Deputy Prime Minister Vuong Dinh Hue in Hanoi on March 5.
 
SMBC will support other local banks’ reforms next time
SMBC will support other local banks’ reforms next time
As the Government of Vietnam has been restructuring the local banking system, the SMBC wants to take part in that process by sustainably developing Eximbank and supporting other local banks’ reforms next time, he said. 
As a global bank, the SMBC expects its clients worldwide will invest in Vietnam and the bank hopes to contribute to the development of Vietnam’s banking industry with its new banking management system, he added. 
He said that SMBC is pursuing the new “Asia-centric” strategy which seeks to strengthen its business in Asia and Vietnam is an important part of the strategy.
At the reception, Deputy PM Hue welcomed the presence of SMBC in Vietnam, describing it as an effective credit channel and a gateway for foreign investors, including those from Japan, to enter Vietnam. 
The government is committed to continue improving local business climate and providing favorable conditions for both domestic and foreign investors, he stated, adding that it will do it best to support SMBC in Vietnam.
Deputy PM Hue also hailed the SMBC’s role in restructuring Eximbank, noting that Vietnam’s new scheme for restructuring credit institutions was adopted to improve capacity of commercial banks and accelerate the resolution of non-performing loans. 
Though the restructuring process has harvested some positive outcomes but many challenges are waiting ahead, Hue said. 
The Prime Minister in July last year issued Decision 1058/QD-TTg approving a project on restructuring the system of credit institutions in combination with settling bad debt for the 2016-2020 period.
The project aims to restructure credit institutions and settle bad debt on the principles of ensuring the interests of depositors and maintaining the stability and safety of the banking system, and reduce the number of badly performing credit institutions.
Overall solutions include completing the legal framework, perfecting policies and mechanisms related to monetary and banks’ operations, improving the financial and business administration capacity of credit institutions, and bettering inspections and supervisions over banks’ operations.
The project stresses the need to improve the capacity of the central bank to make early warning of systematic risks and to prevent the risk of law violations of credit institutions and foreign banks’ branches.
Inspection work will be reformed on the basis of using new risk control tools and methods.
The project also puts forward orientations and measures to restructure commercial banks in which the State holds more than 50 percent of chartered capital, and improve operations of joint stock commercial banks, financial and financial leasing companies.
For bad debt settlement measures, the project asks the central bank, ministries, localities, credit institutions, Vietnam Asset Management Company (VAMC), and organizations and individuals involved to continue implementing the Decision No.843/QD-TTg on settling bad debts of the credit institution system.
Credit institutions are required to review the quality and recovery possibility of outstanding debts, while continuing to restructure debts. 
The SMBC has made present in Vietnam since 1994 with two branches in Hanoi and Ho Chi Minh City. Last year, both of its branches posted no non-performing loans and a total of VND291.6 billion (over US$12.8 million) in net profit. 
It is also Eximbank’s strategic investor who currently holds 15 percent of the Vietnam-based bank’s charter capital.
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