What is the biggest challenge for the MHB and other banks as Viet Nam implements its commitments to open the market under WTO regulations? What will your bank do to overcome these challenges?

Once the country enters the WTO, competition will increase and banking activities will be more transparent. The biggest challenge faced by the country’s banks is reaching international standards.

Now, the banks are restructuring, but as soon as the country enters the WTO, the banks will have to pick up the pace.

MHB has a high capital safety ratio, and a good credit quality verified by international firm Ernst and Young. MHB is the only bank in Viet Nam audited for three years (2003-05) under international accounting standards.

You spoke about restructuring at the Viet Nam Investment Forum: Opportunities on Approaching Investment in the Post-WTO. What will MHB do to restructure?

MHB has developed and also restructured over the past few years to correspond to the current business environment, but we must continue this process. MHB aims to explore all opportunities in domestic banking, including high quality services and new products; to promote services for small and medium enterprises (SMEs) and loans for building and repairing of houses; and to reform company management and business operations.

MHB will also build its internal auditing system under international standards, reform management, and continue IT development to increase new products and expand its branch network nationwide.

Why will MHB, one of the five State-owned commercial banks, focus on providing loans for SMEs?

SMEs have increased quickly and operated effectively in recent years. They play an important role in the development of the economy. MHB has defined SMEs as a potential market. Last year, SMEs and households held 70 per cent of the total outstanding loans at the bank. In the future, those SMEs will have great development potential and heavy demand for capital.

What has MHB paid attention to when providing loans to SMEs?

SMEs are mainly private enterprises. Their projects are very effective but have difficulty getting capital from banks. SMEs owners often mobilise capital for their production from their friends and relatives.

To provide loans for SMEs, banking staff must spend time examining the proposal before deciding on the loan. SMEs’ projects do not have any guarantee from a third party, while State projects have this guarantee. So ultimately, banking staff must use their best judgement.

Source: VNAgency