United Overseas Bank (UOB), based in Singapore, is poised to become the inaugural foreign banking institution to establish its headquarters at the International Financial Center (IFC) in Ho Chi Minh City. This information surfaced during a meeting between Singapore’s Deputy Prime Minister Gan Kim Yong and his Vietnamese counterpart, Standing Deputy Prime Minister Nguyen Hoa Binh.
UOB holds the distinction of being the first Singaporean bank to set up a representative office in Vietnam, a move that dates back to 1992. Following this, in 1995, the bank launched a wholly foreign-owned branch in Ho Chi Minh City.
Expansion Plans
Wee Ee Cheong, UOB’s Deputy Chairman and CEO, who previously met with Binh, disclosed that the bank is contemplating a 20% increase in the capital of its Vietnamese subsidiary to VND10 trillion (US$380 million). This move is intended to facilitate the expansion of the bank’s operations in Vietnam, a Southeast Asian market that UOB regards as strategically significant.
The IFC, which received approval from the National Assembly last June, is set to be established in two locations, with Da Nang City being the second. Several domestic lenders and financial institutions, including MB Bank, Vietcombank, and VietinBank, have shown interest in establishing offices at the Ho Chi Minh City location of the center. Singaporean enterprises, banks, and funds have been invited by the government to establish bases at the financial center.
Support from Singapore
Yong expressed his support for Vietnam’s decision to establish an international financial center, deeming it a timely and appropriate policy move. He also affirmed Singapore’s commitment to share operational experiences and promote financial connectivity between financial centers in both nations.
During Binh’s meeting with executives from approximately 20 esteemed Singaporean enterprises and investment funds, the consensus was that Vietnam should ensure policy stability and expedite the development of the legal framework for digital assets and financial technology.
Singapore is the second largest investor in Vietnam, behind South Korea, out of 153 investing countries and territories. To date, Singapore has invested more than US$90 billion in over 4,400 active projects in Vietnam. The Vietnam-Singapore Industrial Park (VSIP) now comprises 21 parks within 14 provinces and cities. The two nations are enhancing their economic and investment cooperation efforts, in both new and promising sectors such as carbon credits, digital technology, agriculture, energy, and the upcoming VSIP 2.0.
Questions & Answers
What is the significance of UOB’s decision to set up its headquarters at the International Financial Center in Ho Chi Minh City?
UOB’s decision marks a significant milestone as it becomes the first foreign bank to establish its headquarters at the newly approved International Financial Center.
What is the proposed increase in UOB’s Vietnamese subsidiary’s capital and why?
UOB plans to increase its Vietnamese subsidiary’s capital by 20% to VND10 trillion (US$380 million) to facilitate the expansion of the bank’s operations in Vietnam.
What is the current status of investment between Singapore and Vietnam?
Singapore is the second-largest investor in Vietnam, with investments exceeding US$90 billion in more than 4,400 active projects. The two nations are also enhancing economic and investment cooperation in various sectors.
