The state-owned Korea Development Bank is moving forward with its plan to open a branch in Hanoi after receiving confirmation of its application from Vietnam’s central bank — six years after first filing the request.
South Korea’s Financial Services Commission announced Thursday that the State Bank of Vietnam issued a confirmation letter for KDB’s branch application the previous day, marking the official start of the review process.
“The confirmation letter for the Hanoi branch is the result of six years of concerted efforts by KDB and the broader Korean government,” an official from KDB said. “We will do our best to swiftly complete the remaining procedures for final approval."
The confirmation letter is the first formal document in Vietnam’s licensing procedure, indicating that all necessary materials for regulatory approval have been submitted.
KDB initially filed for a license in July 2019.
According to the FSC, Vietnam's central bank had postponed approving new bank branches because of concerns about an oversaturated banking sector in relation to the country's economic scale.
Vietnam is currently home to 45 banks headquartered locally, nine of which are foreign-owned. It is the second-largest overseas market for Korean financial institutions after the US, with 55 offices supporting more than 10,000 Korean businesses and serving a community of approximately 200,000 South Koreans residing in the country.
Nine Korean bank branches operate in Vietnam, including local subsidiaries of Shinhan Bank and Woori Bank. Another state-run lender, Industrial Bank of Korea, is also awaiting approval to establish a local subsidiary in Vietnam, having submitted its application in 2017.
jwc@heraldcorp.com
