Chinatrust Commercial Bank (
Chinatrust, a unit of publicly traded Chinatrust Financial Holding Co (中信銀金控), received permission in February from the central bank to open the branch. A previous application, filed in 1998, was rejected out of concern that Vietnam had too many foreign banks, said Henry Yang, Chinatrust's local general manager.
Twenty-six foreign banks now have branches in the country, according to the State Bank of Vietnam, the central bank. Even so, Chinatrust believes Taiwan's position as the second-biggest investor in Vietnam helps justify having a branch in the country.
"Chinatrust wants to be a global bank," said Yang.
"There's no reason for us to be absent from Vietnam."
Taiwanese companies have committed to US$133 million in projects in Vietnam this year, making Taiwan the second-biggest source of foreign investment behind South Korea, which is involved in projects valued at US$146 million, according to Vietnam's General Statistics Office.
In addition to targeting Taiwa-nese investors, Chinatrust plans to provide credit to local private companies, the number of which has more than doubled since an Enterprise Law was introduced in 2000 to simplify bureaucratic procedures.
"We will not only focus on Vietnamese state-owned companies," Yang said. "Private companies will also be a good market."
Chinatrust has had a representative office in Hanoi since 1995. Rival Chinfon has a branch in Hanoi and it and International Commercial Bank both have a branch in Ho Chi Minh City.
"The market is quite competitive," said Yang. "The banks here have little space to cut their prices." North Carolina-based Bank of America Corp and Thailand's Thai Military Bank Pcl have closed their branches in Vietnam, and about 40 foreign banks have closed representative offices, according to the State Bank of Vietnam.
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