DBS Bank will soon open its first Vietnamese branch in Ho Chi Minh City after it received the regulatory approval to do so yesterday.
Four other Singapore companies - all of which already have a foothold in Vietnam - will also step up their presence further after they inked new agreements to develop major projects in Vietnam.
These fresh deals, seen to be a major boost to economic ties between the two countries, involved property developers CapitaLand and Keppel Land, offshore oil and gas services provider EOC Limited, and United Overseas Bank.
At the signing ceremony yesterday were Singapore Prime Minister Lee Hsien Loong - who began the first day of his four-day official visit here - and his Vietnam counterpart Nguyen Tan Dung. Also present were Minister in Prime Minister's Office and Second Finance and Transport Minister Lim Hwee Hua, and Minister of State for Trade & Industry and Manpower Lee Yi Shyan.
DBS Bank chief executive Piyush Gupta, who received the bank branch licence from the State Bank of Vietnam, noted that Vietnam is becoming a 'very important economy in Asia due to the country's increasing foreign investment and trade.
'The new branch will enable DBS to better support our existing corporate customers, many of whom have a presence in Vietnam,' he said. DBS, which first opened a representative office in Hanoi in July 2008 to spearhead the bank's development of the wholesale banking business, will use the Ho Chi Minh City branch to support the financial needs of Singapore and Asia-based companies with business interests in Vietnam.
Rivals OCBC Bank and United Overseas Bank already have a branch each in Vietnam, also in Ho Chi Minh. Both UOB and OCBC also have equity stakes in Vietnamese banks. OCBC has a 15 per cent stake in Hanoi-based VP Bank, while UOB has a 15 per cent stake in Southern Commercial Joint Stock Bank, based in Ho Chi Minh.
'We have applied for a 100 per cent foreign-owned subsidiary bank licence which we hope to receive in the near future,' said OCBC head of corporate communications Koh Ching Ching in Singapore.
CapitaLand Vietnam's joint venture agreement with Hoang Thanh Investment & Infrastructure Development Joint Stock Company will see both parties develop a 14,000 sq m residential site in Ha Dong District, its second residential development in Hanoi.
CapitaLand group CEO Liew Mun Leong said that Vietnam is the group's fourth pillar of growth after its core markets of China, Singapore and Australia. 'We target to grow our business in Vietnam to 10 per cent of the group's total assets, up from the current one per cent, over the next three to five years.'
EOC Limited's cooperation agreement with PetroVietnam Transportation Corporation is to incorporate a joint venture company to provide operations and management services to the floating production, storage and offloading vessel for the Chim Sao oil project located off Vietnam. EOC was spun off from oilfield services group Ezra Holdings Limited in 2007 and listed on the Oslo Stock Exchange.
Keppel Land Limited's signing with Tien Phuoc Co for a joint venture agreement between Keppel Land's subsidiary KLL Strategic Holdings and Tien Phuoc will commit the two firms to develop a 11ha waterfront residential site in Ho Chi Minh City.
And lastly, United Overseas Bank Limited will partner the Vietnam National University in Hanoi to launch a US$300,000 interest-free loan programme for Vietnamese undergraduates. Called the UOB Vietnam Student Fund, it will benefit some 700 students as the money is disbursed progressively over a three-year period.
Said International Enterprise Singapore's regional director for Vietnam and Cambodia Chiong Woan Shin: 'These projects mark the continued confidence and interest that Singapore companies have in the long term potential of Vietnam. Vietnam was one of the few countries that continued to grow strongly despite the global downturn, and by most counts, is expected to do even better this year.'
The Asian Development Bank reported that Vietnam retained its five per cent growth in 2009, and is projected to grow by a further 6.5 per cent this year. Despite the global downturn, Singapore companies continued to invest strongly in Vietnam in 2009, with 98 investment projects worth US$470 million.
As of last November, Singapore is ranked fifth in terms of registered capital in Vietnam, with US$17 billion from 766 investment projects. Some of the flagship Singapore projects in Vietnam include the Vietnam-Singapore Industrial Parks, which have expanded from the south of Vietnam in Binh Duong, to the north in Bac Ninh and Hai Phong city.