financial services seabank perspectives
TRANSCRIPT
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Retail banking:
competing by technology,
advancing to regional integration
Madame Nguyễn Thị Nga
Chairman of SEABANK
2 SEABANK - Finance Session
Speech outlines
Vietnam Banking 2012 at a glance
Retail banking: What makes a transformation?
Issues & recommendations:
Non-cash payment
Access to bank accounts
SME financing
Open discussion
3 SEABANK - Finance Session
Vietnam Banking 2012 at a glance
Vietnam's banks see rising assets in 2012
Source: SBV (as of Nov2012)
Assets
Total assets $233bio
Assets increment – whole system $3.2bio (1.4%)
Assets increment – SOC banks $1.3bio
Assets increment - JSC banks $1.2bio
Equity
Total equity $20bio
YOY increased equity 7.89%
JSC equity $452mio
Charter capital
Total capital increase 9.68%
7 top achievements in macro governance
1. Inflation restricted at 6.81%
2. Forex market stabilised, FYC reserve
increased
3. Lending interest rate largely bended to
fit in businesses’ capital absorbability
4. VND value appreciated due to anti-dollar
& anti-gold policies
5. Industry inspection activities better
disciplined for transparency
6. Industry restructuring execution better
undergoing
7. Quality of credit recognised by SME,
despite low credit growth
4 SEABANK - Finance Session
Vietnam financial market background
Banking Vietnam 2012 Conference
(Hanoi, May 2012)
The financial services industry
continues to undergo rapid and
complex changes in Vietnam.
Beyond the rapidly evolving
economic landscape, these
changes are also driven by
advances in technology,
changing customer needs and
adjustments to regulation
5 SEABANK - Finance Session
Issues
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Things that matter
• Economic restructuring
• Industry regulatory adjustments
• Consumer trends
• Technology advances
• Complicated fraud
• Unbalanced network distribution
• ASEAN integration framework
What to be addressed
1. Non-cash payment
2. Access to bank accounts
3. SME financing
Non-cash payment
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Backgrounds • Banks advancing to product
diversification due to technology advances
• Awareness to Usage: conversion rate still low
• Security concerns arising among users
• Prime Minister approval: 2011-2015 Non-cash payment promotion
Recommendations 1. Stronger policies & regulations applied to all sectors 2. Technology infrastructure to be enhanced 3. Convergent Payment Advisory Model 4. Cross-border tools to be established
Access to bank accounts
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Backgrounds • Only 20% population with bank
accounts • Network & facility distribution only
grouped in urban areas • Cash payment culture • E-commerce popular, yet, only
purchase orders counted
Recommendations • Banking facilities in rural
areas to be more invested • Online payment regulations
for related parties • Non-cash payment
regulation: More universal execution needed
SME financing: What’s in it for SMEs?
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• Lending rate cap offer
• Gov guarantee for capital access
• Defer VAT tax payment
• Waiver on income tax, other fees, charges
• Extra fund pumped for banks financing SME
Government
• Own source of fund: >2,000bioVND in 2012
• New approach: Total banking relationship
• Product portfolio: working capital, daily banking
• Credit risk control: Convergence model
SEABANK
Capital access for SME: What needs
addressed?
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Issues from SMEs
Financial transparency: Low
Corporate governance: Weak
Collateral creditability: Unstable
Cash payment: High
Recommendations
Stronger policies to clear the “cloud”
Cash flow management enhancement
Risk control police for collateral
Non-cash payment infrastructure
Summary
Issues Recommendations
Non-cash payment/Cross-
border payment
Access to bank accounts
SME financing
Adjustments to regulations: stricter and more
comprehensive execution
Technology infrastructure: More invested
Rural banking facilities: More invested
Risk control on cross-border payment:
Convergence model
SME financial transparency: More auditing
regulations to be established
11 SEABANK - Finance Session
Appendix – Vietnam economic outlook 2013
What Vietnam economic situation will be like in 2013 and more
LE DANG DOANH, Economist:
“Recoverage of market
confidence is key”.
Resolutions in focus:
-Industry restructuring to be
better executed
-More realistic policies to be
designed
Mr CAO SY KIEM, former SBV
Governor:
“Stricter execution towards applied
policies”.
Resolutions in focus:
-Bad debts
-Real estate standstill
-Commodity inventory
PHAM CHI LAN, Economist:
“Classification of insolvent
enterprises for tailored
resolutions”.
Resolutions in focus:
-Economic restructuring to be
accelerated
-Insolvent equity liquidation
better than capital bailout
NGUYEN DUC THANH,
Lecturer:
“Administrative measures to
dominate market-oriented
measures”.
Resolutions in focus:
-Prudent policy in interest rate
-Realistic Monetary policy to rise
local business competition
capability
12 SEABANK - Finance Session