Commercial banks target infrastructure and digital finance as Vietnam pursues its “Vision 2045”
State-run lenders move to back national projects, including potential nuclear power cooperation
President Lee Jae-myung shakes hands with Vietnamese Prime Minister Le Minh Hung at the Prime Minister’s Office in Hanoi, Vietnam, on April 23 local time. <Newsis>
[Insight Korea = Yun Chan-woo]
South Korea’s major banks are moving aggressively to support Vietnam’s economic growth, aligning their overseas expansion strategies with Hanoi’s long-term development agenda.According to financial industry sources on April 27, commercial banks including Shinhan Bank and Woori Bank, as well as state-run lenders such as the Export-Import Bank of Korea, joined a Korean economic delegation to Vietnam on April 22. During the visit, they signed memorandums of understanding with local financial institutions and industry players in areas ranging from infrastructure and energy to digital finance.
Vietnam’s “Vision 2045” Meets the Interests of K-Finance
South Korea has steadily deepened economic cooperation with Vietnam since the country joined the World Trade Organization in 2007. Korean investment in Vietnam nearly doubled from $694 million in 2006 to $1.329 billion the following year, before peaking at $4.616 billion in 2019.
Investment later fell sharply to $2.947 billion in 2020 amid the impact of the Covid-19 pandemic and has since remained largely flat, reaching $2.866 billion last year.
Vietnam is now promoting its “Vision 2045” strategy, which centers on a transition toward high-tech manufacturing and the goal of becoming a high-income country. The long-term plan aims to lift Vietnam into the ranks of upper-middle-income economies by 2030 and turn it into a developed, high-income nation by 2045.
At present, Vietnam’s economy remains heavily dependent on low-value-added manufacturing based on simple processing and assembly. According to the Korea Institute for International Economic Policy, Vietnam’s key export industries, including electronics and chemicals, have a high dependence on foreign value added, making the development of local supporting industries an urgent task.
To achieve Vision 2045, Vietnam needs more than $30 billion in foreign direct investment each year, along with an industrial upgrade toward advanced technologies. That has increased the importance of South Korea’s role as one of Vietnam’s largest investors.
Commercial Banks Focus on Infrastructure and Digital Finance; Policy Banks Back National Projects
Shinhan Bank, which has established itself as the leading foreign bank in Vietnam, plans to strengthen cooperation with local central and state-run banks as well as FPT Group, Vietnam’s major information and communications technology company.
Shinhan Bank CEO Jung Sang-hyuk met Nguyen Ngoc Canh, deputy governor of the State Bank of Vietnam, to discuss financial support for Korean companies seeking to expand in Vietnam. The two sides also shared expertise in digital finance and ESG management.
Shinhan Bank then signed MOUs with Vietnam’s state-owned commercial banks Vietcombank and Agribank, respectively, to expand cooperation in corporate finance, infrastructure and cross-border financial solutions. It also met with FPT Group to establish a digital finance partnership based on artificial intelligence and big data.
“Vietnam is an important market that symbolizes Shinhan Bank’s global growth roadmap,” Jung said. “In line with the Korean government’s economic diplomacy, we will create a model case of ‘productive finance’ that supports the global competitiveness of Korean companies and continue a genuine financial partnership for shared prosperity.”
Woori Bank signed an MOU with Viettel Global, a subsidiary of Vietnam’s state-run telecommunications company Viettel Group. Through the agreement, the two sides agreed to elevate their existing financial relationship to a higher level. They plan to share information and know-how related to Viettel’s overseas business operations and pursue strategic cooperation, including additional financial support for investment in new markets.
The Export-Import Bank of Korea also signed a four-party MOU in Hanoi on the same day with Korea Trade Insurance Corp., Korea Electric Power Corp. and Vietnam’s state energy company Petrovietnam. The agreement concerns a review of possible financial cooperation for Vietnam’s nuclear power projects.
The key areas of cooperation include reviewing financial support measures for new nuclear power projects in Vietnam, supporting the establishment of financial models to secure project feasibility and forming a working-level consultative body on nuclear power financing.
“This MOU marks an important starting point for expanding KEXIM’s financial expertise into Vietnam’s nuclear power sector,” said Hwang Ki-yeon, chairman of the Export-Import Bank of Korea. “We will continue to strengthen our role as a reliable financial partner so that Korean companies can become major players in Vietnam’s nuclear power market.”
-This article was translated by ChatGPT. (이 기사는 챗GPT가 번역했습니다.)
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