Vietnam

With its strong growth and rising levels of income and urbanization, the country is attracting plenty of PE. The challenge, both in the private sector and in those SOEs the government is selling, is to find deals that fly.

Saigon Securities

Corporate and social responsibility is still a relatively new thing in Vietnam. Most banks channel a portion of their capital to worthy causes, but their limited resources are often spread thinly: many seeds are scattered in the hope that a few will grow. Saigon-Hanoi Commercial Joint Stock Bank (SHB), led by chief executive Nguyen Van Le and one of the country’s big-five privately owned lenders by assets, has opted for a more systematic approach to CSR. Over the past year, its ‘Love sharing’ and ‘Wings of faith’ programmes sent D5 billion ($215,000) worth of gifts (clothing, books, food) to the children of disadvantaged families, while also delivering invaluable leadership skills and lessons.

This may well be the toughest award to win in Vietnam. Over the last decade, the government has focused its attention on the country’s army of small and medium-sized enterprises, reckoned by the Credit Information Centre to number 500,000. Banks are tacitly encouraged to lend to them and to offer preferential rates to borrowers.

Digital banking, a slow burn in Vietnam, finally seems to have taken flame. In recent years, domestic banks have been frantically rolling out new online services to demanding customers. Some of these underwhelm, while others, such as privately run VPBank’s digital channel Timo, impress. But none can hold a candle to Citi. The US lender, a growing digital force across Asia, clearly sees Vietnam as a key part of its regional strategy. It uses its local Facebook page (launched four years ago and with 190,000 fans) to target customers and reinforce its brand, then focus on the sale (the digital contribution to Citi’s credit card acquisition rate rose 29% year on year in 2017).

Some international lenders don’t quite know what to make of Vietnam. Perhaps the last great, untapped emerging market, it is bursting with potential, but still a work-in-progress. It oozes growth and entrepreneurial spirit, yet the capital markets are young and there are precious few firms of genuine scale.

Every year, Vietnam’s capital markets take the next step in their long-term development, growing in size and maturity. And each year, investment bankers fight tooth and nail over the deals that pepper the market: a few chunky IPOs and equity placements here; a couple of government debt sales and syndicated loans there. It all adds up.

Vietnam is a country on the move. Inflation is under control, unemployment is low and growth is tipped by the IMF to come in at 6.5% this year and next. Now the country just needs a good banking sector.