26 Aug 2021
Posted in Business Fundamentals
Vietnam continues to attract foreign companies eying ASEAN expansion, says GlobalData
Following the news that Thailand-based Bank of Ayudhya has agreed to acquire SHB Finance from Saigon-Hanoi Commercial Joint Stock Bank in Vietnam;
Aurojyoti Bose, Lead Analyst at GlobalData, a leading data and analytics company, offers his view:
“Bank of Ayudhya is the fifth largest bank in Thailand by assets while SHB Finance is among the top 10 consumer finance companies in Vietnam. The acquisition will help Bank of Ayudhya gain a strong foothold in Vietnamese consumer finance market as it seeks growth outside Thailand as a part of its ASEAN expansion plan.
“Vietnam remains a prolific market in the ASEAN region. It was the best performing Southeast Asian country in 2020 without a single quarter of contraction despite the COVID-19 pandemic. GlobalData forecasts Vietnamese economy to grow by 8.5% in 2021 and grow at an annual average rate of 7.3% over the next three years (2021f – 2023f).
“Moreover, according to GlobalData Country Risk Index (GCRI) 2020, Vietnam is a manageable risk nation ranked 65th out of 136 nations in the GCRI Q4 2020. The country’s risk score was 42.8 out of 100 according to the GCRI, placing it in the manageable risk nations band.
“On the back of economic stability and decent risk score, Vietnam is attracting investments from several companies globally, including those from Thailand as well. And not only Bank of Ayudhya, other Thai banks are also eying expansion in Vietnam. In February 2021, another Thai bank, Kasikornbank Pcl announced plans to open branch in Vietnam.”