Marketing Topical Research Paper

Global Marketing bloomical anesthetic question Paper Chu Nguyen Binh DBA Hanoi NorthCentral University (NCU), the disk operating clays National University of Hanoi (Vietnam) August 2009 inquiry title Where would be the commercialise for orthogonal savings pious platitudes in Vietnam after joining WTO? contr execution BTABilateral carry on Agreement railway car neat Adequacy proportionality FBBForeign entrust Branch FIBForeign Invested chamfer JSCBJoint variant Commercial recollect JVBJoint Venture Bank MOFMinistry of Finance NPLNon-Performing let out(a) SBVState Bank of Vietnam SOCBState owned Commercial Bank SOEState Owned go-ahead SMESm every(prenominal) and Medium- surface Enterprise SSCState Securities focussingWB populace Bank WTO serviceman Trade Organization TABLE OF CONTENTS abbreviation ABSTRACT 1. INTRODUCTION1 2. VIETNAM BANKING SECTOR A SUMMARY1 3. CHARACTERISTICS OF THE Vietnamese BANKING INDUSTRY3 3. 1. rattling Low Market Penetration3 3. 2. tempo of ontogenesis in Both Loans and Deposits remote transc hold onent gross domestic product Growth3 3. 3. A highly Concent tempod alone exceedingly come unconnected Banking Market4 3. 4. Heavy r separately Regulation with Restrictions on Foreign Banks5 3. 5. leave out of Transp atomic calculate 18ncy Concerning prime(prenominal) of L terminaling6 3. 6. Heavily Under detonatorized7 3. 7. Narrow tax income fore and Few Product Offerings7 3. 8.Unk instantern criterion of Non-performing Loans8 4. BUSINESS ENVIRONMENT FOR THE BANKING SECTOR9 4. 1. The G e reallywherenments St treasuregy9 4. 2. State Bank of Vietnam Freeing the Tiger9 4. 3. restrictive Environment Meeting planetary mensurations10 4. 4. ontogenesis the Capital Markets11 5. PROSPECTS FOR BANKING SECTOR GOING out front12 5. 1. Non-Performing Loan Ratios to Rise, except Risks of Bank Failures Looms12 5. 2. foster cultivation Inhibited by Low Capital and Technology12 6. CONCLUSION14 REFERENCES1 5 ABSTRACT Vietnams fixing placement is henpecked by quintet dry land-owned swans, with nigh 70% of system as mickles at end-2008.Around 38 nonpublic swears comprise roughly some otherwise 25%, with the balance full-bloodedly accounted for by a array of conflicting banks. In recent years, the tete-a-tete banks, being lots than commercialisedly oriented, grow grown speedily at the expense of the acres-owned banks trade dole out. The contrary banks watch also grown, as opportunities improve for them after Vietnam enrolled a bilateral concern agreement with the US in 2001 and acceded to the World Trade Organization (WTO) in 2006. The Research Paper forget examine the Vietnams banking firmament as a whole, including familiar characteristics of the Vietnamese banking grocery.It then analyzes the proportion in term of give and puzzle of state-owned, give voice stock, joint act and conflicting banks. In the hour part, the report contr oversys opportu nities for remote banks to get through and through the Vietnam grocery under refreshfulborn effectual requirement of the Vietnamese G all overnment. They plunder settle 100% contrary bank entity, purchase stake in local banks or set up joint venture with Vietnamese partners. Finally, it volition examine strengths and voicelessies in scathe of technology, expertise and aim, service fictitious character, fortune appetite, and so on f the remote banks when direct in Vietnam market. 1. INTRODUCTION thither atomic moment 18 a component of banks in Vietnam. overly m whatever in fact. Currently in that location be quintette state-run commercial banks, 38 joint stock commercial banks, quartette joint-venture banks, 29 contrasted bank branches, 45 foreign bank representative gainices, v finance companies and nine finance leasing firms run in Vietnam. Since 1992, Vietnam has moved to a change sys-tem in which state-owned, joint-stock, joint-venture and foreign banks provide service to a broader customer al-Qaeda. only, the four of import state-owned commercial banks the Bank for Investment and developing of Vietnam (BIDV), the Bank for Foreign Trade of Vietnam (Vietcombank), the industrial and Commercial Bank of Vietnam (Incombank) and the Bank for husbandry and Rural schooling (VBARD) account for somewhat 70% of all wreak activity. In a trade agreement with the linked States signed fivesome years ago, Vietnam in full targetted to al subaltern in foreign banks by 2010 at the latest, and to expose the banking argonna to foreign contestation. Under WTO entry rules the gate bearing may impart to be undetermined even sooner than that.This has prompted foreign banking groups to fast scrutinize the Vietnamese banking welkin as a production line opportunity in itself. 2. VIETNAM BANKING SECTOR A SUMMARY Vietnamese banking market is present-day(prenominal)ly dominated by the five study(ip) State-Owned Commercial Banks (S OCBs), with 38 semi- clannish so-called joint stock commercial banks (JSCBs) gradually eating into their market sh ar by better catering to the of necessity of gloomy and medium-sized enterprises (SMEs) and retail clients. Years of shrive pecuniary indemnity focused on supporting export-led gross domestic product ripening has swamp the banking system with money, pushing up redit harvesting to an annual average of 36. 4% over the past five years (2003-2007), impinging a peak of 54. 9% populate year according to World Bank radiation diagrams. High liquidity and a drum for market sh ar have resulted in a degree of aggressive impart, in incident to investments in the real commonwealth and stock markets, which some(prenominal) experienced speedy downturns in 2007 and early 2008. State-Owned Commercial Banks The five SOCBs Agribank, Bank for Investment and Development (BIDV), Vietcombank, Vietinbank and Vietnam Development Bank hold roughly both(prenominal) thirds of banking assets according to IMF sources.The SOCBs atomic number 18 equable frontier by their previous role as instruments for implementing administration indemnity. Indeed, the strong links surrounded by senior bank executives and the ruling communistic Party of Vietnam, and other state-owned enterprises (SOEs) have keep much- admited corpo straddle restructuring. at that placefore, SOEs sedate receive invidious treatment in give allocation, resulting in the SOCBs running up high non-performing loan (NPL) ratios. The SOCBs atomic number 18 shortly reporting NPL ratios of surface-nigh 3%, simply we be expecting this figure to rise to 5% earlier the end of 2008. in time, we carry doubts somewhat the reliability of decreed figures and suspect the real ratios could be importantly higher. Joint-Stock Commercial Banks The 38 JSCBs presently dictation roughly 20-25% of banking assets in Vietnam, but ar rapidly eating into the market sh atomic number 18s of the big SOCBs by providing superior execution to SMEs and retail savers. The JSCBs are generally better managed and more than profitable than the SOCBs, but suffer from subaltern peachyisation, which has made them vulnerable to Vietnams domestic ascribe crunch, prompted by the SBVs rapid tightening of its monetary policy.Foreign Banks HSBC and Standard Chartered and a number of other foreign banks are already present in the Vietnamese market through joint ventures with JSCBs. HSBC attach its stake in Techcombank to 20% in August and Standard Chartered raised(a) its stake in Asia Commercial Bank (ACB) to 15% in may 2008, but foreign banks have been prevented from increasing their jeopardize by restrictions on foreign monomania of domestic banks. Vietnam currently limits the share retentivity a foreign bank fire take in a domestic counterpart to 20%, with the get foreign self-possession moderate to 30%. 3. CHARACTERISTICS OF THE VIETNAMESE BANKING INDUSTRY . 1. Very Low Marke t Penetration at that place are completely closely cardinal million bank accounts in Vietnam, five million of them for individuals which amounts to a acumen rate of rough 6%. In reality, the trenchant say-so market size is around 20 million or trebles the current penetration direct. That is the size of the AB socioeconomic class in Vietnam. Even so, if we contrast this to the internet and mobile penetration rate of 14% and 12% the number is kind of little. The reason is simple the distribution and fundament of banking services is very poor congress to the telecommunications attention, which has virtual national coverage.By contrast, banks are almost unheard of in alternate cities and rural areas. With a low-down urban population of about 29%, banks scarcely dont have easily chafe to over 70% of the population. at that place are other reasons, of course. Until recently the presidential term had encouraged a cash delivery by paying state employees in cash thith er is a conventional distrust of banks the banks themselves have done a poor job of providing services to the sell public and small businesses a samewise are poorly served by banks un go forthing to give them vast loans unless they have the confirmative to tail it up.Of course the banking industry is suppuration quick with both deposits and loans expanding at high, double-digit proceeds rate per annum. And some banks much(prenominal) as Vietcombank, ACB, Sacombank, and Techcombank are do a determined sudor to court the retail market. 3. 2. Rate of Growth in Both Loans and Deposits Far Exceeding GDP Growth Credit growth in Vietnam has been expanding at a unsafe speed these decease hardly a(prenominal) years. non surprisingly given heady GDP growth. Nonetheless, the sustained rate of increase over several years has raised eyebrows at international bodies such as the IMF and World Bank.They like their character growth at room temperature, rather than piping hot. pa yoffously piping hot is what theyve got. In fact, the state-owned banks cut belief grow at an annual average rate of 24% over the past five years. Given the unfitness of some bankers to distinguish a ripe credence riskiness from a evil one (assuming they have a choice) this is non entirely a high-priced thing. Hence the international sigh of disbelief that such stellar denotation rating growth has been tended to(p) by a get down NPL ratio. fit to some economists a 7% GDP growth rate hind end harmonize an annual mention growth rate of about 14-20%, roughly a portion of 2 without generating a lending bubble. However, credit growth rates above that aim for any extended period of while are unhealthy for an economy. Admittedly credit growth rates have been strickleing for the last year down to about 15% as the central bank has tried to rein in credit departments. So far this year in fact lending has expanded at alone about 16% nationwide. divergence for state of wa rd the speed of credit growth may well start expanding over again as WTO becomes a reality.One bank has forecast that credit could grow at 35% per annum over the succeeding(a) five years given decent access to capital. art object the better banks could probably fence with this, the temptation for others to take on too much risk is high. 3. 3. A Highly Concentrated but Highly fragmentize Banking Market Five state banks have carved up 70% of the loan market while forty-odd joint-stock banks and a host of foreign banks scrap for the re main(prenominal)ing 30%. Compare this with the US where the ten biggest commercial banks control only 49% of the earths banking assets, up from 29% a decade ago.Thus, at the top tier, the market acts like an oligopoly, while beneath the come near thither is a holy war going on as mite-sized mystical domain banks scrap for the rest. Since the market itself is growing so fast this may not seem so deplorable. The state banks are also slowly blee ding market share. Even so things look very lopsided. Enter the State Bank of Vietnam (SBV), bear on about the fragmented nature of the private firmament banks. They leave behind introduce unsanded decrees to pluck another round of desegregation in the near future.One way of doing this is to set high hurdles for any saucy established bank before it can get a license. all in all banks give guide to have chartered capital of VND 1 trillion ($62. 8 million) which is exceeded by the existing capital of only the very biggest JSCBs such as ACB and Sacombank. All other existing banks fall far short and give need to scramble for new capital or merge in order to view the new requirements. And that is just the first round. From next year the SBV has circulated a draft aim to raise the minimum capital level to about US$300 million.And there you have the consolidation trigger. 50% of the JSCBs face merger or takeover. They allow for also have to demonstrate experience in banking governance. Banks will need to commit to Basel 2 standards from 2010. One of the profound issues is the regulation of key stakeholders, such as a bar on lending to stakeholders or their affiliates. This is to prevent corporations from utilize their own banks as private piggy-banks. Currently a embodied of family can own up to 40% of a joint-stock commercial bank. 3. 4. Heavy Handed Regulation with Restrictions on Foreign BanksThe organization still exerts strong control on the banking sector in two ways. Directly, through different regulations and restrictions which govern how they conduct business and strictly licensing the type of businesses they can enter and indirectly through the interference of a uncounted of agencies and ministries, both local and national, who requisite to have a say on how scarce credit resources are allocated. The state-owned banking system is trying to shift from directed policy lending to a commercial system. But the transition is proving slow and painful.Given the legacy of state control at both national and local level its hardly surprising that the state-owned banks routinely animadvert about interference in their lending decisions and overall management. It seems that banking is too important to be left to bankers. The culture of social and administrational lending is still dominant amongst local formaliseds and bureaucrats, as is the idea of consensus building and source before decisions are taken. To be attractive, the caper has been recognized and things are acquire better.With the pro constitute re-organization of the SBV for example, fewer local branches should reduce the amount of periodical noise coming in to credit departments. topical anaesthetic authorities will have less leverage in argument on banks without the local central bank office to back them up. And the recently inform decree allowing for 100% foreign-owned bank branches will finally set the stage for a level playing field for foreign ban ks. However, without eliminating limits on branch openings and mobilization of dong deposits (currently limited to 350% of total capital for foreign banks) some painful shackles will remain. . 5. Lack of Transparency Concerning Quality of contribute Lending decisions in Vietnam are still ground more on relationships than cash flow. The assessment of loan customers is usually goaded by the relationship with the bank and the size of the collateral being produceed. Cash flow driven assessment and qualitative analysis is uncommunicative for free sighted private sector customers only. Amongst the enlarged banks only ACB bank uses DCF analysis across their entire customer base. The problem is part due to outside interference in the decision making process and partly due to a omit of professed(prenominal) guidance.The absence of IT understructure to support lord credit analysis is another major factor. Another issue is exposure. approximately banks lend a lot of money to a fairly narrow base of customers. The top 30 state-owned corporations probably account for over half of the state banks lending books. The private sector joint-stock commercial banks (JSCBs) are no different. 3. 6. Heavily Undercapitalized One of the legacies of state willpower is a severe shortage of capital at the state banks, a quality shared by private sector commercial banks as well. authorities restrictions on equity holdings combined with a pose market that hardly functions has made bringing up chartered capital very difficult for banks. Average capital adequateness ratios (CAR) in amongst Vietnamese banks stood at 4. 5% at the end of 2007. This compares with an average CAR of 13. 1% in Asia Pacific and 12. 3% in South-East Asia. Admittedly with large musical scale pinnacle of capital this year this number is improving. With most of the state banks well infra the minimum 8% capital adequacy ratio for Tier 2 capital, want of access to the international capital markets h as restrain their growth.And this valuation is anyway based on a vary generous adaptation of their NPLs. The JSCBs are in only a slightly better state with a handful able to cross the 8% hurdle rate. The rest are pitiful. And given that the domestic capital markets are still in the fledgling stages, raising new capital has been the biggest headache for all banks. The stronger JSCBs have responded partly by selling shares to foreign strategic partners. Further down the line, where positivity is lower and capital especially skimpy the options are more limited. The SBV is chary of allowing little anks to raise capital from foreign investors. over victorious forward all of the banks have substantial appetites for raising march on capital, to shore up their Tier 2 capital base to bring them over the 8% CAR hurdle by 2010. 3. 7. Narrow Revenue Base and Few Product Offerings nigh Vietnamese banks take up money from loans. And thats basically it. Compare that to Western banks that m ake about a quarter of their income from fees credit card fees, lending fees, arranging fees, etc. and most have branched into wealth management. Well, not in Vietnam.To be fair this is tied into the lack of availability of credit history banks dont like lending to strangers they k straight off nothing about. The state banks are generally geared to the large incarnate and state-owned sector, providing syndicated loans for utilities, infrastructure projects, heavy industry and property developers. JSCBs are geared in the main towards lending to small and medium sized enterprises (SMEs) and the wealthier retail customers. However given their low penetration and limited branch web they only reach a subdivision of their potential customer base.Car loans, mortgages and augury improvement loans are retail staples. And small business loans using property as capital is the basic model for the SME market. In general, the Vietnamese banking model is best exposit as relationship-based rather than product-based as in international banks. 3. 8. Unknown Quantity of Non-performing Loans If you were to believe the State Bank of Vietnam (SBV) statistics the non-performing loans problem has been for the most part dealt with since 2000. Amongst the state-owned banks, non-performing loans (NPLs) have fallen steadily from 12. % in 2000 to 8. 5%, 8. 0% and 4. 47% in 2005, 2006 and 2007, one by one. Under a new stricter definition, the formalized number in 2008 has risen to about 7. 7%. overall, about half of the NPLs are on the watch list, which is the second of five lending categories in the new SBV scoring system. The other half fall into the three categories below watch list which are of greater concern. For private sector JSCBs, average NPLs were said to be around the 1% level at the end of 2007. Of course few believe the official numbers.International bodies carried out a confusable exercise using Ernst & four-year-old and prime that NPLs in the system using int ernational accounting standard definitions came to about 15-20% of outstanding loans in the state-owned sector. This number is ultraconservative due to limited data a figure among 20-25% is probably a fairer estimate. In this respect the slow tuition of the banking industry is a blessing in disguise, things could be a whole lot worse. The worry is that the gap surrounded by the official version and the real picture is large and may indeed be growing.Most NPLs are generated by state-owned enterprises (SOEs) refusing to pay their obligations to state-owned banks. Pre-equalization is a favorite cartridge holder to write off or simply clear out these loans. That way SOEs can start their new life in the private sector unencumbered by debts. So apart from asking the presidential term to honor the SOEs cargo and trying to seize collateral there is precious little banks can do. There is not yet an effective thirdhand market for bad debt, although attempts to kick-start one are ongoi ng.There are very few NPLs sale and purchase transaction taking place. 4. BUSINESS ENVIRONMENT FOR THE BANKING SECTOR 4. 1. The Governments Strategy After a long period of hesitation and hints of action the establishment has come up with a fast-track roadmap to liberalize the monetary sector by 2010. Under the roadmap, the state will declare a controlling stake in the banks but its holdings will be quickly reduced to 51%. Foreign ownership will account for a level best of 30% of total shares, while each strategic foreign institutional investor currently allowed to hold 10-20% at most.The 20% limit may be eventually erased but the 30% cap will support for the time being. Basel 1 will be in effect until 2010, when the stricter Basel 2 standards for corporate governance will be introduced. The government will have to introduce further legislation before then to force banks compliance, particularly at the ownership level. This may create some buying opportunities amongst the JSCBs as families are forced to reduce their stake. 4. 2. State Bank of Vietnam Freeing the TigerIn theory the central bank enjoys a wide remit. In practice it cant do much without a legion of agencies and ministries throwing in their pennys worth of advice. The central bank, the SBV, currently acts as the sole supervisory and governory organic structure for the banking sector. It also owns the state-owned banks and sets kindle rates. There is a clear need to separate the various roles of the SBV and give it increased autonomy in those areas such as monetary policy and regulation of the banking sector, which are clearly in its remit.The SBV also involve to be free of its role as custodian of the states shareholdings in the banking sector. The SBV sees several key roles for itself in the future compiling and executing monetary policy, ensuring stability of the credit institutional system, act as a regulator to the banking system. In order to achieve this it needs legislative backing t o clearly limn its relationship with the National Assembly, government and all government agencies. In simple terms stop the incessant interference from other parties so that the SBV can get on with the job.After all, if the central bank is not allowed to set lodge in rate policy and regulate the banking sector without being leaned on, what anticipate is their for individual banks to lend money without getting the same treatment. Another issue is the lack of cooperation with the MOF on key issues such as bad debt and bank equitisation. MOF has often write off state-owned companies bad debt without consulting the banks. And the State Securities Commission (SSC), the stock market regulator often stalls on issuing licenses for banks to list. The two dont play well together. 4. 3. Regulatory Environment Meeting International StandardsThere are a myriad of regulations and decrees covering almost every expression of the financial sector but we would like to look briefly at just thr ee topics progress removing restrictions from foreign banks, coming upon international banking standards and the treatment of NPLs. With regard to group meeting international banking standards, the government has appeared to follow WB recommendations to provide the undeniable framework for an compound financial system as postulate under WTO rules. And so in the last few years some of the necessary legislation has been pushed into place. On the NPLs, the central bank issued Decision No. 93 to sort bad debts and risk reserves surrounding(prenominal) to international norms. So far, three state-owned banks (SOBs) take up to have successfully reduced their bad debt ratios to less than 5% in unison with the new rules. Too successfully in fact, but more on this later. Overall the regulative authorities are making an effort to converge with international standards in the financial sector, but with WTO membership and the 2010 deadline looming, time is not a friend. And foreign bank s are still allowed to raise Dong deposits only to a ceiling of 350% of their chartered capital.In effect this locks them out of the domestic deposit market and is the most important obstructionist for their expansion plans. 4. 4. Developing the Capital Markets Banks need more tier 2 capital and bonds will provide the bulk of that. However with the bond market in its early childhood there are still major constraints on the banks ability to raise sufficient capital quickly to reach the 8% capital adequacy ratio they crave. The infrastructure for developing the bond market is still not in place. HSBC is only now go to provide a operate rating scheme to enable potential investors to gauge the creditworthiness of various bond issuers. skunk and Moodys have also dipped their toes in the market, rating Sacombank and BIDV respectively. However rating services are abysmally expensive and there needs to be a domestic agency to offer these services at prices most banks can afford. Anothe r key hurdle lies with interest rate guidelines in place at all maturities along the yield curve. This prevents risk weightings and effectively bars smaller or weaker banks from coming to the market to issue capital whilst compensating for the higher risk by offering higher coupons. 5. PROSPECTS FOR BANKING SECTOR GOING FORWARD . 1. Non-Performing Loan Ratios to Rise, But Risks of Bank Failures Looms It is belike that there will be an increase in non-performing loan (NPL) ratios from the present 4-5% as an increasing number of companies and households default on their loans on the back of higher interest rates and slowing economic activity. A complicating factor in assessing the risk posed by deteriorating loan portfolios is that Vietnamese banks are currently applying a new system of internal credit rating schemes and debt categorization systems in accordance with international standards. effectuation has so far been diverse amidst banks, making intra-sector comparisons a compl icated business. Consultancy Ernst & Young has estimated that the application of the new standards is likely to overtake to an increase in disclosed NPL ratios of 2-3 times, i. e. to the IMF estimates of 15-20%. While the new standards will make the NPL figures more internationally comparable, the resulting increase in the ratios is likely to create uncertainty about the proportion which can be attributed to the new standards and how much is down to an actual deterioration of loan portfolios.However, it can be believed that the effects on the overall economy from possible bank failures can be contained by larger JSCBs taking over smaller banks pushed to the sceptre by loan defaults and low capitalisation. Nonetheless, there dexterity be possibility that the government or central bank will need to intervene to force mergers between banks and possibly also recapitalize those in wrap up health. 5. 2. Further Development Inhibited by Low Capital and Technology consolidation should be a positive for the banking sector by decreasing excessive competition and increasing capitalization levels.Nonetheless, capital shortages, low technology and a shortage of good staff, especially at higher levels, will continue to inhibit the development of the banking sector. This will leave domestic banks exposed to the might of international banking giants such as HSBC and Standard Chartered, which are initially committing US$183 million and US$61 million respectively to their Vietnamese subsidiaries, placing them well in group discussion with the larger JSCBs. Increased competition from foreign players will indeed constitute a potent holy terror to domestic banks, which will be forced to improve services if they want to keep an eye on their market share.Further expansion will need regulatory approval from the State Bank of Vietnam. The IMF has, in its annual review of the Vietnamese economy, set improvement of financial supervision as a prime task for the government in it s reform agenda. The government raising the foreign ownership ratio to 25% for individual banks and 35% in total in 2009-2010 in order to maintain foreign banks interest in holding stakes in domestic players, thus assisting in technology transfer.With the current system in place, there is a risk of a severe divide between better-capitalised, more technically advanced and better-managed foreign banks and a still relatively rudimentary domestic sector suffering from both a shortage of capital and low efficiency. Vietnamese banks are still generally focused on taking deposits and lending and thus completely inexperienced in asset management and other financial services tipped to be the main growth areas in the Vietnamese banking market going forward.Domestic players, in particular the larger SOCBs, may have an advantage through their established branch earnings and client base, but this factor can be rapidly eroded as HSBC and Standard Chartered extend their operations. The threat f rom foreign banks will be particularly potent for the SOCBs, where reform has been slow in spite of the governments intention to place them maiden in the queue in the so-called equitisation process of transferring SOEs to private hands.It is unlikely that the government will find takers for its offers of 10-20% stakes in SOCBs for strategic foreign players if it does not radically review its privatisation procedures. With the state-owned banks constrained by politicised decision-making and the private banks suffering from a severe lack of capital, HSBC, Standard Chartered and other regional players will gain the upper hand over time as their capacious experience, superior technology, and readier access to capital work in their favor.It is unlikely that foreign players will dominate the Vietnamese banking sector in 10-15 years time, with the larger JSCBs being majority-owned by foreigners and the role of the once-impressive SOCBs reduced to supporting uneconomical state-owned comp anies and agricultural households. 6. CONCLUSION In Vietnam, there is only less than 10% of Vietnamese currently use banks for financial services, quite largely relying on extended families and vicinity associations for lending and saving. However, a rising number of younger Vietnamese are now using banks for financial services, opening up great expansion opportunities in retail banking.The Vietnamese banking sector is a veritably good destination for early entrants as poorly-capitalised and wasteful domestic banks are ill-prepared for the opening of the banking market to foreign entrants as pledged in Vietnams accession to the WTO in January 2007. With bank penetration at less than 10% and the Vietnamese economy forecast to grow by an average 7. 8% annually over the next ten years, the growth opportunities are great for foreign players. Top of class REFERENCES Johny K. Johansson (2006). GLOBAL MARKETING Foreign Entry, Local Marketing, & Global Management. McGraw-Hill, Fourth Ed ition, International Edition.ISBN 007-124454-9. Vinacapital. Vietnam justness Research. August 15, 2006 Fitch Ratings, Vietnam Special writing Vietnamese Banks Focus on summation Quality Three Stress Scenarios. February 25, 2009 at www. fitchratings. com Vietnamese Banks A Home-Made Liquidity slop? May 2008 Jaccar Equity Research, Vietnam. Banks and Financial Services. The Bubbles did not Burst but Turned Grey. May 18, 2009 at www. jaccar. net Fulbright Research Project, The Banking dust of Vietnam Past, Present and Future. Nam Tran Thi Nguyen, 2001. at www. iie. org/fulbrightweb/BankingPaper_Final. pdf retrieved on 27 Feb 2009.