HSBC Bank (Vietnam) chief executive Pham Hong Hai (right) and Kelvin Tan, chief executive of HSBC Thailand, say HSBC aims to capitalise on its presence in seven of the 10 Asean countries.
HSBC seeks to offer a better integrated regional service with the increase of cross-border investment following the formation of the Asean Economic Community (AEC).
The bank in particular is looking at Vietnam, where investment is set to surge under government policies to attract foreign investment.
Kelvin Tan, chief executive of HSBC Thailand, said the company aimed to capitalise on its presence in seven of the 10 Asean member countries. Only Myanmar, Cambodia and Laos do not have branches of HSBC.
“We made it very clear to our investors since last year that Asean will be one of our main focuses to help HSBC’s future growth,” said Mr Tan.
HSBC will also focus on the Pearl River Delta, which consists of Hong Kong and Guangzhou, China.
Mr Tan said the company will enhance the connectivity between its subsidiaries in each country to serve customers better and expand business.
“We add value to our services by offering well-connected financial services in this region.”
When a Thai customer expresses an interest in investing in another country in which HSBC operates, the bank will refer the customer to the office in that country, which can provide local information for doing business.
Many HSBC customers have already expanded their businesses in other countries, especially Vietnam, to tap into a bigger market as well as take advantage of low labour costs, he said. Thai investors should benefit from the cheaper labour by setting up production bases there and using Thailand as their regional headquarters, which is the policy that the Thai government is promoting.
“Thailand is in a very strategic location for logistics and air transport so pushing the RHQ concept is a step in the right direction, but the government will also have to include stakeholders as part for this development,” said Mr Tan.
Pham Hong Hai, chief executive of HSBC Bank (Vietnam), said Vietnam had attracted heavy investment from Asean countries over the past few years as well as from other Asian countries such as South Korea, Japan, Taiwan and China.
Vietnam’s low labour costs and political stability are the major draws that attract a huge amount of foreign direct investment, he said. Given the low wage rate for unskilled labour, the country has attracted a lot of labour-intensive industries.
“Cambodia, Laos and Myanmar also have cheap labour, but Vietnam has the added positive factors of political stability and good infrastructure,” said Mr Pham.
He said the low wage rate would last for about five years.
However, one problem that has emerged in Vietnam is a shortage of workers at management level. Mr Pham said he expected the AEC integration to attract more white-collar workers to the country.
He said Vietnam’s ruling party just elected a new central committee, which is expected to maintain the current policies to strengthen the country’s economy.
The policies that will be continued include privatisation of state enterprises, modernising the banking sector, enhancing the effectiveness of fiscal policy and improving the business environment, he added.
Vietnam’s state enterprises contribute 35% of GDP. The government is due to allow private firms to gradually own bigger stakes in the enterprises in order to enhance their effectiveness.
The government is improving Vietnam’s business environment by passing new laws that will shorten the time required to start a new business and also to obtain a licence, Mr Pham said. There there are a lot of opportunities in businesses such as logistics, retail and manufacturing, which are growing quickly.
“When the manufacturing sector grows it is always followed by logistics services to support the industries,” he said. “We also see that the retail sector’s growing fast with Thai companies such as Central and TCC Group investing in Vietnam.”
He said with a population of 90 million, with young people forming a large proportion, Vietnam’s demographic make-up offers great opportunities for retail businesses to benefit from their purchasing power, which will grow significantly.
