Foreign strategic cooperation – opportunity for development

VIR: A number of local banks have benefited from cooperation with foreign partners since last year, why does it take so long for SeABank to take on a foreign partner?

Madam Nguyen Thi Nga: SeABank and Societe Generale have started negotiations over a strategic partnership since 2007 and it took a very long time for us to reach agreements on strategic cooperation. Societe Generale has conducted thorough studies on SeABank’s risk management capacity; products & services, market coverage development strategies and human resource. That takes time, of course. And finally, the two sides have reached an agreement in which Societe Generale would hold 15 per cent stake in SeABank.

It should be noted that SeABank was one of the first joint-stock bank established in Vietnam 14 years ago with current chartered capital of  VND3,000 billion and nearly 60 transaction points nationwide. Over the first half of 2008, our pre-tax profit was VND258 billion.

Throughout our operation, in 2006 we have improved our base technology with T24 Temenos core banking software, the most advanced version so far as well as other advanced technologies. Additionally, SeABank has been building up a young, dynamic and potential human resource under the management of experienced and devoted steering committee. These have been the key factors for French giant Societe Generale to select SeABank as their first retail banking partner in Asia.

From our parts, we have set basic criteria in selecting strategic partner which must be a famous international bank with strong development in retail banking and experience in international cooperation that could help SeABank become a leading retail bank in Vietnam. And Societe Generale met all our criteria.

VIR: How would this partnership help SeABank improve services quality?

Madam Nguyen Thi Nga: Firstly, upon our partnership agreement, Societe Generale would provide technical assistance to help restructure our current business, improve risk management capacity, and assist SeABank expanding retail banking network. We all know that poor risk management capacity is posing a common challenge to local banks and the French partner would help us to fix it.

Secondly, French bank would bring their best experts over Vietnam to assist us in organization structure and train our staffs and this would secure our long-term development with adequate human resource.

Via this partnership, SeABank would diversify our products & services, particularly retail banking services and our customers would be eventual beneficiaries with much more sophisticated banking products and services up to international standard. Moreover, SeABank would have advantage of establishing and developing relationship with correspondent banks all over the world as well as participating in international card alliance, that improve the Bank’s comprehensive development.

VIR: The competition in banking sector is getting fiercer especially with the participation of wholly foreign-owned bank, how do you think about the opportunities of local lenders in this competition and what would be SeABank’s strategy in coming time?

Madam Nguyen Thi Nga: Of course, the participation of foreign players would make the competition much tougher. However, both local and foreign lenders have their own advantages. Foreign banks are equipped with advanced technology and better management practices, the factors that have enabled them to access markets worldwide. But in Vietnam banking market, local lenders have built up a broad base of customers with nationwide branches networks. More importantly, local banks understand much better local business culture. Vietnamese banks are all improving their products & services quality especially with the assistance of foreign partners. Thus, it is not easy or it would take a long time for foreign banks to attain a substantial market share in Vietnam for instance 20 or 30 per cent.

With SeABank, in short-term vision, we still focus on developing retail banking products & services. However, in medium term, we are planning to develop SeABank as a leading finance-banking organization in Vietnam. By then, we would take the second step by expanding our products and services to regional and international markets.

Recently, we have implemented successfully many modern E-banking services that only several Vietnamese banks could be able to do, such as: Internet Banking, SMS Banking and Email Banking. Their are strong points that we have achieved over a very short period.

VIR: Thank you very much!

(According to Vietnam Investmet Review No.886/October 6-12,2008)