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Aside from the widely covered growth stories of China and India, Vietnam has been quietly attracting its fair share of attention from foreign banks. RBI's Titien Ahmad talks to Adil Ahmad, general manager of alliances at Australia's ANZ Bank, about the key success factors of cross-border joint ventures
Vietnam - whose population has a literacy rate of 94 percent and average life expectancy of 70 years - is not a typical emerging Asian economy. There is good basic medical care and education, and although communism still rules in the country, foreign trade has been driving economic growth. GDP grew at a compound annual rate of 7.1 percent between 2000 and 2005, while GDP per capita runs at $2,700 after adjustments for purchasing power parity.
The Vietnamese banking sector has recorded annual growth of 24 percent in terms of assets over the past five years, while loans and deposits have experienced annual growth of 28 percent and 25 percent, respectively, over the same period.
Up to 70 percent of the banking market measured by assets is held by the six state-owned banks, while the 28 foreign banks which have branches in the country have between a 12 percent and 15 percent share. Additionally, there are 37 joint stock banks and 44 foreign banks with representative offices in the country, which together constitute a busy and varied banking sector.
Australia's ANZ Bank was the first foreign bank to go into retail banking in Vietnam via a partnership with Sacombank, the country's largest private commercial bank measured by both capital and network size. Adil Ahmad, general manager of alliances at ANZ Bank, shared his experience of managing the strategic equity partnership.
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