(VEN) - Aymar De Liedekerke Beaufort, who heads BNP Paribas in Vietnam, explained why the country was attractive to foreign banks, and how his bank has contributed to the nation’s growth.
Bamboo Bike Cycling in Mekong Delta (CSR event of BNP Paribas Ho Chi Minh City Branch in 2017)
Having been in Vietnam since 1989, what do you think about the development of the banking industry in the country?
Tremendous efforts have been made by the State Bank of Vietnam over the past few years to improve the quality of the balance sheets of many commercial banks. The Vietnamese banking industry has therefore become healthier and is a key player in supporting Vietnam’s gross domestic product (GDP) growth. Credit growth is something we carefully look at and BNP Paribas Vietnam’s credit growth mirrored Vietnam’s significant 18 percent Credit Growth in 2017.
The Vietnamese banking industry is very well positioned to implement and follow Basel II requirements in the next few years. We are also already seeing mergers in Vietnam and this trend should intensify in the future, leading to an increased consolidation of the market.
Aymar De Liedekerke Beaufort, Head of Country in Vietnam, CEO of BNP Paribas Ho Chi Minh City Branch
Could you highlight main activities and contribution of BNP Paribas to the local banking industry?
BNP Paribas has been present in Vietnam since 1989 and celebrates its 30th anniversary next year. With 100 employees in 2018, BNP Paribas is focused on building and growing our own client franchise through our branches in Ho Chi Minh City, which we have held since 1992, and our more recent investment in the Hanoi branch in 2015. Our capital investments total US$150 million and are in addition to our significant stake in Vietcombank Cardif Life Insurance.
In Vietnam, our activity is focused on Corporate Institutional Banking (CIB), mainly servicing state owned enterprises (SOEs), private owned enterprises (POEs), and multinational corporations (MNCs) from the US, Europe and Asia. We actively support local corporates in their expansion, fund raising and risk management needs. As the country evolves as an attractive destination for MNCs to set-up and expand operations, BNP Paribas’ strong international network leaves us well-placed to partner with them. In the financial sector, our capital market expertise is benefiting Vietnamese financial institutions and from a corporate advisory standpoint we continue to bring strategic investors into the growing domestic market, as well as facilitate access to European markets. A dedicated team of relationship managers accompanies our clients with all product lines and services such as Global Cash Management, Trade Services, Global Markets and Export Finance. Our Investment Banking team is very active in advising and supporting our clients in their mergers and acquisitions (M&A) activities. Our presence in Vietnam is further strengthened through our partnerships with Sacombank and BIDV.
What are pros and cons for your bank to do business in Vietnam? Do you think Vietnam is a potential destination for foreign banks?
Vietnam is a key market for BNP Paribas with great growth potential: economic indicators are strong and business conditions are improving year after year. In line with the country’s strong economic development, foreign direct investments are increasing steadily, reflecting continued strong investor interest due to the country’s large market potential, attractive manpower and manufacturing conditions both in terms of cost and quality, as well as its positive GDP trend. Vietnam and Europe also enjoy strong ties.
With our strong global network especially in our home markets of Europe, all these conditions offer a great opportunity for us to facilitate MNCs and European companies looking to invest into the market, and at the same time support Vietnamese companies looking to spread their wings across borders. It also gives us the opportunity to deepen our relationship with these clients across diverse sectors such as commodities, FMCG, new technologies.
Importantly, the Vietnamese government is welcoming towards foreign banks like BNP Paribas and we are proud to be able to support our clients - MNCs and Vietnamese corporates - and contribute to the economic development of Vietnam.
Tree planting in teams in Can Gio (one of meaningful activities of the bank to contribute to the local society)
How is your bank’s business in 2017 and what is your growth expectation for 2018 in Vietnam?
2017 was a very positive year for BNP Paribas Vietnam thanks to the favorable economic conditions in the country. GDP growth ended up above expected levels in 2017 at 6.8 percent. Our international and local clients benefited from this growth and we were able to partner them in their ambitions across the board with our Corporate Banking, Advisory and Strategic Financing, and Investment solutions. Indeed, this positive growth trend should continue in 2018-2019 with a projected average annual GDP growth of 6.4 percent. In 2018, our growth remains strong, driven by new products and a number of opportunities including the financing the Capital Expenditure (Capex) investments of our clients through Working Capital Facilities.
What factors will BNP Paribas focus on as the advantages to differentiate to other competitors here?
As a leading international bank, we bring our global network strength here: with the economy opening up foreign investment in various sectors, we facilitate European companies looking to invest into and enter the market. For example, BNP Paribas acted as sole advisor on the strategic M&A between a European drug maker and a Vietnamese pharmaceutical company. This deal enabled the expansion of Vietnam’s healthcare and the people’s access to it.
Our network strength is also an important enabler of cross-border deals within ASEAN, including between Thailand and Vietnam. For example, BNP Paribas was the financial adviser to Casino Group for its €1 billion sale of Big C Vietnam to Thailand’s Central Group. Our network strength continues to be a significant proposition and enabler for businesses within the region and beyond.
We also differentiate ourselves with tailor-made solutions for our clients through digitalization. Globally, we are investing €3 billion in 2020 plan to reinvent customer journeys, digital transformation and operational efficiency. In Vietnam, we are working even closer with our clients to provide them latest banking technologies and innovative products, such as the implementation of several Supply Chain Financing programs through which our clients improve their business efficiency. The support of our regional headquarter in Singapore is a considerable asset that we leverage, as well as our worldwide client network.
We are also proud to benefit from well-trained and competent employees: our employees are our key asset and significant efforts have been made to develop an inspired and skilled workforce. We believe this is a key factor that sets us apart in the market here.
Could you tell us about the development direction of BNP Paribas in the years to come as well as expanding operation in Vietnam?
BNP Paribas Vietnam will continue to partner Vietnamese corporates in the years to come, during which business regulations should continue to ease. Indeed, the government will continue to liberalize the economy step by step while restructuring SOEs. We look forward to supporting our existing and potential SOE clients to navigate challenges and maximize opportunities.
In addition, Vietnam has further diversified its economic partners in 2018 and deepened its integration into international trade (ASEAN, Regional Comprehensive Economic Partnership and the EU-Vietnam Free Trade Agreement). Particularly, the ratification of the EU-Vietnam Free Trade Agreement in 2018 is a very important development for both economies. As leading Bank for corporates in Europe, BNP Paribas is looking closely at new potential business opportunities across exiting relationships, thanks to its wide network in Asia Pacific and in the world.
In the years to come, Vietnam with its growth potential represents a key market for BNP Paribas in APAC, which will continue to be a growth region for the Bank.