Ms. Natasha Ansell, Citi Country Officer for Vietnam, shares her thoughts with VET's Nguyen Quynh on the country's banking sector and the bank's performance in Vietnam.
■ After one year as Citi Country Officer, what is your view of Vietnam’s banking sector and the country’s monetary policy?
The banking sector stabilized further in 2015 building on the progress made in recent years.
There was positive growth and it is clear the banking sector is on the right path under the stewardship of and management by the State Bank of Vietnam (SBV) and Governor Nguyen Van Binh, with the banking sector contributing to the country’s economic growth of around 6.5 to 6.7 per cent this year. For 2016 Citi is forecasting another year of strong growth of 6.5 per cent.
Interest rates and exchange rates were constantly monitored and adjusted against the macro-economic situation. Restructuring has recorded encouraging results reflecting the efforts of the SBV and Governor Binh in making the industry leaner but stronger.
Monetary policies were executed proactively, flexibly and in line with fiscal and other macro-economic policies. I was impressed with the transparency, clarity and consistency in how the SBV executed monetary policies in 2015 - it gives strong confidence to the market and international investors.
■ What do you forecast for the country’s banking sector in 2016 following the finalization of the TPP and further global integration?
Vietnam’s growth prospects remain resilient. It is the only economy in the region where our economists’ growth forecast was upgraded significantly since the beginning of 2015.
Vietnam will be a significant beneficiary of the TPP. It is the only TPP-negotiating member that is a transition economy and thus has negotiated for more time and flexible arrangements than others and is seen as one of the biggest beneficiaries.
The TPP will establish a free trade area in the Pacific Rim that will set comprehensive and enforceable disciplines for trade and investment among its members. This will mean more growth and jobs for these economies. The agreement is also an important expression of the respective governments’ confidence in the power of competition and freedom of movement of capital, goods and services.
We expect that banking restructuring efforts will be made in preparation for economic integration, especially when the TPP commences. Banks might face stronger competition from new competitors in the region and globally, which should spur further restructuring.
Investment flows from TPP members will generate opportunities for banks to expand their business to cater to the increasing needs of clients. The TPP is important for Vietnam and for the banking sector, in particular international banks like Citi.
■ What challenges may Vietnam’s banks face in 2016?
The challenges are plenty. As I said earlier, the commencement of the TPP and further global economic integration will open up huge opportunities for Vietnam’s industries, including financial services. However, they come with challenges and domestic banks will face increased competition.
The regulatory environment is also evolving quickly and banks that succeed will be the ones that can adapt and react quickly to the evolving market and regulatory conditions.
■ How would you comment on Citi Vietnam’s businesses performance over recent years?
Citi was the first US financial institution to receive a branch license, in 1994, and the first bank to launch internet banking in Vietnam, in 2001. We are proud of our history in Vietnam.
Today Citi offers the full range of banking services in the country. We have branches in the dynamic cities of Hanoi and Ho Chi Minh City and a nationwide partnership network that covers all of Vietnam's 63 cities and provinces.
We feel very proud that we are making a meaningful contribution to Vietnam. Serving as a trusted financial partner to the country’s leading corporations and State-owned enterprises, Citi has driven the largest and most successful capital market transactions in Vietnam, including industrialization and modernization projects of airlines, power, transportation, oil exploration, expressways, and electronics.
In 2007 Citi also launched the first long-term negotiable instrument to be issued in Vietnam dong, to help develop the local capital market via a floating rate issue with a tenor of two years.
We have invested further to support our clients and we have been expanding our footprint in the retail market. The last year was a year of progress for Citi in Vietnam with good momentum with a growing market share in both our retail and institutional businesses. We saw good growth in areas like credit cards, personal loans, cash advances, and insurance.
In late 2014 Citi Vietnam launched commercial banking services in Vietnam. With the large number of small and medium-sized enterprises (SMEs) in Vietnam, many of which support supply chains of multinational corporations, our asset portfolio and client base is projected to grow further in the next five years. We want to support Vietnam’s established corporate champions and the champions of tomorrow.
I am just as proud though of our commitment to responsible finance in the country - it is how we define our business. We aim to ensure that our actions are in the best interests of our clients, are designed to create economic value and, at the same time, are systemically responsible.
Citi Vietnam’s citizenship priorities are around the areas of microfinance, financial education, community development, and employee volunteering. It is important that as a company we are contributing back into the local communities where we operate.
■ Can you tell us about Citi’s strategies in Vietnam for 2016?
Contributing to the banking sector and supporting our clients are Citi’s priorities in the year ahead.
We are committed to serving as a trusted partner to our clients by responsibly providing financial services that enable growth and economic progress. We constantly evolve to serve all of our clients’ needs in ways that make banking more efficient for them, so technological innovation is also key to our growth in the future.
When it comes to innovation we quickly bring the power of technology and digitization to serve our clients. We were the bank that pioneered the widespread use of ATMs and made them an industry standard, and now we are looking at the next step - screen-less/card-less ATMs. Vietnam is one of many countries in the region where we have launched the Smart Branch model.
■ Would you like to share any additional thoughts with our readers on the occasion of the lunar new year, Tet?
A new year is like a new chapter, a moment to reflect on what you have done and what needs to be done to improve.
But some things remain constant, such as our focus on supporting our clients and contributing to economic progress in Vietnam.
Finally, as we enter the new year, the Year of the Monkey, in 2016, I would hope that it brings good fortune and good health to all our clients, the management and staff of Vietnam Economic Times and, of course, your esteemed readers.