The Rise of Southeast Asia and the Mark of Vietnamese Banks

In recent years, Southeast Asia has become an attractive destination for global investors. According to the report “Navigating Strong Winds: Southeast Asia Outlook 2024-2034” by Angsana Council, Bain and Company, and DBS, the region is expected to grow faster in the next decade, with higher GDP growth and total foreign direct investment (FDI) compared to China.

Fortune, an American business magazine, also emphasizes the increasing importance of Southeast Asia in the global economy. Post the COVID-19 pandemic, many large multinational corporations in the Global 500 have relocated part of their supply chains to this region.

“With a young population and a total population of up to 680 million, low inflation, and stable exchange rates, Southeast Asia is emerging as a highly attractive market,” Fortune writes.

Recognizing the allure of Southeast Asia, Fortune – renowned for its authoritative rankings – decided to publish the Fortune Southeast Asia 500 (Fortune SEA 500) for the first time. According to Fortune, this list comprises the 500 largest companies, representing a dynamic Southeast Asia – a region contributing approximately $4 trillion to global GDP and witnessing impressive growth rates.

“With this list, we are drawing attention to the impressive growth story of Southeast Asia and the largest companies that have driven the diverse economic development of the region,” said Khoon-Fong Ang, Chief Operating Officer of Fortune Asia, regarding the rationale behind the ranking.

A glance at the Fortune SEA 500 reveals that Vietnamese banks have made significant contributions to the overall growth of Southeast Asia. Out of the 200 leading companies in the ranking, 34 banks are represented, with 12 from Vietnam alone. With the goal of becoming leading financial institutions in the region and globally, Vietnamese banks have been expanding their scale in terms of capital, assets, and overseas networks.

Among them, Saigon-Hanoi Commercial Joint Stock Bank (SHB) is one of the most successful private banks in its expansion beyond Vietnam. The SHB brand and reputation have established a presence and made an impact in the ASEAN region, including Laos, Cambodia, and Myanmar.

In terms of scale, SHB is among the TOP 5 largest private joint-stock commercial banks in Vietnam, with total assets of VND 659,767 billion as of June 30, 2024, and a charter capital of VND 36,629 billion. For the first half of 2024, SHB achieved a pre-tax profit of over VND 6,860 billion, an increase of 13% compared to the same period last year, completing 61% of the annual plan. The bank is also finalizing the dossier for the State Bank to issue a 11% stock dividend for 2023, expected to increase its charter capital to VND 40,658 billion.

In addition to its growth story, SHB is also a pioneer in operational efficiency, with the lowest CIR (cost-to-income ratio) in the banking system for several consecutive quarters. Capital adequacy ratios and risk management always comply with the State Bank’s regulations, and liquidity risk management follows Basel II and Basel III standards.

In its business operations, SHB accelerates digital transformation and applies advanced technologies to optimize, simplify business processes, enhance operational efficiency, and improve customer experience. SHB is the only Vietnamese bank to win two awards at the Digital CX Awards 2024 hosted by The Digital Banker magazine, with the participation of evaluators from PwC, Deloitte, Forrester, and Capco. This award system recognizes and honors innovative and pioneering initiatives in digital customer experience within the global financial ecosystem.

The two awards bestowed upon SHB were “Best Digital Platform Experience – Cash Management Platform” for its “Collection via Slink Designated Account Service” and “Best Use of Technology for Digital CX” for its “ACAS Automatic Credit Approval System.” Notably, both digital solutions were independently researched and implemented by SHB using internal resources and personnel.

With its strong financial foundation, modern technology platform, and diverse product/service ecosystem, SHB meets stringent criteria and becomes a trusted partner of many leading financial institutions worldwide, including WB, IFC, and ADB. Through these partnerships, the bank gains additional critical resources to develop policies to support businesses, especially small and medium-sized enterprises (SMEs) and female-owned enterprises.

Since the beginning of the year, SHB has been consistently recognized by international organizations with awards related to the SME customer segment, such as “Best Sustainable SME Bank – Vietnam” (Alpha Southeast Magazine), “Vietnam’s Best SME Bank” (FinanceAsia and Euromoney magazines), “Best Domestic SME Collaboration Initiative,” and “Best Domestic Financial Initiative with Social Impact” (ABF Magazine).

Additionally, SHB has been highly regarded by reputable organizations and investors for its adoption of ESG standards in its business operations. At the FinanceAsia Awards 2024, FinanceAsia magazine honored SHB as “Best Bank for ESG in Vietnam.” This is the second consecutive year that SHB has won in this award category, demonstrating the bank’s commitment to sustainable development goals.

Ranking 137th in the Top Fortune SEA 500 and receiving numerous accolades from prestigious organizations, SHB has affirmed its stature and reputation in the financial market, contributing to the region’s overall growth story.