HDBank to open its representative office in Myanmar by the end of this year

After getting the approval from the State Bank of Vietnam (SBV), Ho Chi Minh City Housing Development Bank (HDBank) said that it was competing procedures to open a representative office in Myanmar, scheduled to be active by the end of the year.

Myanmar promises to be an attractive place for investors, particularly for Vietnamese companies that are already doing business in the country. Not only HDBank, but a number of others are making plans to expand into Myanmar.

Vietnam Bank for Investment and Development (BIDV) and Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) have both been licensed to set up their offices in the neighbouring country.

In September of 2011, Vietinbank became the first Vietnamese bank to set up operations in Germany. The bank also opened a branch in Lao, and has plans for further expansion this year.

According to Phan Huy Khang, general director of Saigon Thuong Tin Commercial Joint Stock Bank, Vietnamese banks are also open to certain risks when operating abroad. They must compete with local banks and even other Vietnamese banks in the same country.

Experts say that expanding operations in foreign countries will help banks to open up new markets and opportunities as well diversify their products. This would also help Vietnamese companies, many of which are also expanding into neighbouring countries.

Dr. Le Dang Dat, from University of Economics, Ho Chi Minh City, however, warned that the State Bank of Vietnam should keep close scrutiny over the financial capacity of banks which invest abroad so as to mitigate risks for banks and their customers. Dat added that Vietnamese banks should improve their risk management systems in general.