As reported by newswire The Korea Herald, the State Bank of Vietnam issued a confirmation letter for KDB’s branch application in early May, marking the official start of the review process. The state-owned KDB initially filed for a licence in 2019.

“The confirmation letter for the Hanoi branch is the result of six years of concerted efforts by KDB and the broader Korean government,” an official from KDB said. “We will do our best to swiftly complete the remaining procedures for final approval."

According to South Korea’s Financial Services Commission, Vietnam's central bank had postponed the approval of new bank branches due to worries over an oversaturated banking sector in comparison to the country's economic magnitude.

There are 45 banks headquartered in Vietnam, nine of which are foreign-owned. Vietnam is the second-largest overseas market for South Korean financial institutions after the United States, with 55 offices supporting more than 10,000 Korean businesses and serving a community of approximately 200,000 South Koreans residing in the country.

South Korea has nine bank branches in Vietnam, including Shinhan Bank, Woori Bank, KEB Hanam, and Lotte Card. Another state-run lender, Industrial Bank of Korea, is awaiting approval to establish a local affiliate in Vietnam after submitting an application in 2017.