SMBC pledges continued support for Eximbank
Minoura told the function in HCMC on Friday that Vietnam’s banking system is experiencing many difficulties, including soaring bad debts, prompting all banks to pay attention to risk management. Therefore, SMBC, a large Japanese bank, will assist Eximbank in this field to prevent adverse impacts of bad debts on the local lender’s operations.
During five years of strategic cooperation, SMBC has advised and suggested Eximbank to improve planning capacity and risk management system in line with international standards. Accordingly, Eximbank has improved its credit policy and concentrated credit management model and strengthened risk management in lending, capital, gold and currency business areas, Minoura said.
Minoura noted that SMBC and Eximbank would have to compete with many strong rivals from Japan in the coming time after Mizuho Corporate Bank acquired a 15% stake in Vietcombank in January, 2012 and Tokyo Mitsubishi UFJ Bank has held a 20% stake in Vietinbank. However, the senior executive expected that the five-year partnership and other advantages in strong relationship, effort and determination of staff will help the SMBC-Eximbank alliance to provide better services than latecomers.
To further improve competitiveness, SMBC will assist Eximbank in boosting retail banking as it has done over the past time. Specifically, SMBC has helped Eximbank in attracting Japanese customers in Vietnam to expand its customer base, and setting up retail banking plans in medium and long term.
SMBC will also send experts to Vietnam to deploy projects with Eximbank such as developing new product packages, bolstering card business, boosting automobile loan programs and improving product quality management to meet diversified demands of customers.
Recalling on the establishment of this alliance, Minoura said that Asia-Pacific was the core location in SMBC’s business strategy with Vietnam being an important market. Therefore, SMBC had to look for a partner that could absorb its techniques to keep developing as a private commercial bank and contribute to development of Vietnam economy. “And we have found a qualified partner, Eximbank,” Minoura said.
Over the past years, SMBC has supported Eximbank in accessing international capital sources at reasonable costs and boosting liquidity with inter-bank lending limit, trade finance and guarantee. Besides, SMBC has helped Eximbank select and apply advanced information technology and train its staff. Thanks to such supports, Eximbank has made a great growth rate in both scale and operation quality.
“From a bank having a charter capital of VND2.8 trillion and total assets of VND33 trillion in 2007, Eximbank has spurred its chartered capital to over VND12.3 trillion and total assets of over VND170 trillion at the end of 2012,” said Eximbank general director Truong Van Phuoc.
Japanese Consul General in HCMC Harumitsu Hida expected that thanks to this partnership, Eximbank will continue speeding up banking corporate management to become a bank that will not only expand retail banking in the country but also contribute to the development of commercial relationship between the two nations through financing Vietnamese and Japanese enterprises in the import and export sector.
Hida said Japanese firms are enhancing their presence in the city. As of February, the Japanese Enterprises Association had 617 members, a strong rise compared to the same period of last year. Japan took the lead in foreign investment capital in Vietnam last year with around US$5.1 billion. This is a chance for Vietnam in general and the banking network in particular.
SMBC and Eximbank agreed to enter into the Strategic Alliance Agreement in 2007. SMBC now holds a 15% stake in the local bank.
Speaking to the Daily, Eximbank chairman Le Hung Dung said that SMBC wanted to raise its ownership but foreign ownership in Eximbank has reached the ceiling level.
SMBC currently is the biggest shareholder in Eximbank, followed by Vietcombank with 8.19% and VOF Fund of VinaCapital with 5.02%.
