4 days ago
IBK gains preliminary nod for Vietnam unit after 8-year wait
The state-run Industrial Bank of Korea has secured preliminary confirmation from the Vietnamese central bank, bringing the policy lender a step closer to establishing a full subsidiary in the country.
The State Bank of Vietnam issued a confirmation letter for IBK's subsidiary application on May 30, marking the official start of the review process, the Financial Services Commission announced Monday. The confirmation comes nearly eight years after IBK first submitted the request.
The confirmation letter indicates that the screening process has officially begun and that all necessary documentation for regulatory review has been submitted.
Vietnam's central bank has rarely approved new foreign banking subsidiaries in recent years. The last such approval was granted to Singapore's United Overseas Bank in September 2017.
Once IBK's Vietnamese subsidiary is established, Korea will have three banks operating in Vietnam — alongside Shinhan Bank and Woori Bank — drawing level with Malaysia as the country with the most foreign bank subsidiaries in Vietnam.
IBK currently operates two branches in Vietnam, one in Hanoi and the other in Ho Chi Minh City. These branches are expected to be absorbed into the new subsidiary once it is established.
Earlier in May, the Vietnamese central bank also approved the Korea Development Bank's plan to open a branch in Hanoi, six years after the policy bank first submitted its request. KDB currently operates only a representative office in Vietnam and does not conduct direct business operations in the country.
The FSC highlighted that these recent approvals are the result of continued bilateral diplomacy between Korea and Vietnam, including high-level summits, executive discussions, and official correspondence.
'The issuance of confirmation letters for IBK and KDB is an unprecedented outcome that reflects the government's financial diplomacy and the banks' proactive efforts,' the FSC said.
Officials from IBK and KDB stated that the policy lenders aim to support both Vietnamese businesses and Korean companies expanding into the country, thereby contributing to mutual economic growth. IBK plans to focus on financing small and medium-sized enterprises, while KDB intends to support large-scale infrastructure projects.
