A file photo of a Siam Commercial Bank service store in Thailand
Siam Commercial Bank, Thailand's third-largest bank by assets, is planning to open its branch in Vietnam, Thai media reported Monday as Thai businesses have boosted their activities in the country.
The bank, which has been operating in Vietnam through joint venture Vinasiam Bank (VSB) with a local bank, is waiting for a license from the State Bank of Vietnam for its branch in Ho Chi Minh City, The Nation reported.
Expected to be launched this year end, the branch has its capital registered at $75 million, much higher than the minimum of $15 million set by the State Bank of Vietnam, the newspaper said.
The Vietnamese government last month issued an authorization that would allow Siam Commercial Bank to convert the joint venture business into a wholly owned operation.
Once Siam Commercial Bank acquires the license, VSB will be liquidated and all its assets and liabilities, estimated around US$100 million, will be transfered to the new branch, according to the news report.
The Thai bank owns 33 percent stake at the join venture, founded in 1995, while another 33 percent is owned by Thailand's Charoen Pokphand Group, and the rest by state-owned Agribank.
The news comes as Vietnam seeks to reform its crowded banking sector, plagued by bad debts after years of risky lending and non-core investments by state-owned enterprises that surged when the property market froze.
Vietnam is one of four target countries -- besides Cambodia, Laos and Myanmar -- Siam Commercial Bank hopes to get significant income growth in the coming years, The Nation reported.
So far the bank has opened five branches in Laos and Cambodia , either by itself or in collaboration with a local partner.
In Myanmar, however, it failed to secure a license for a branch last year, even though it has been operating in that country through cooperation with local banks and Japan's Mizuho Bank.