During a meeting on June 23, Vietnam's Deputy Prime Minister Le Minh Khai warmly welcomed Kim Sung-tae, chairman and CEO of Industrial Bank of Korea (IBK), and Kang Seoghoon, chairman and CEO of Korea Development Bank (KDB).

The meeting was to explore potential collaborations between Vietnam and South Korean financial institutions in the context of Vietnam's banking system reforms. Khai emphasised the crucial role that South Korean organisations could play in supporting Vietnam's banking sector in restructuring.

Seoghoon expressed admiration for Vietnam, describing each visit to the country as a homecoming.

He highlighted KDB's remarkable development under the guidance of the South Korean government. Seoghoon also shared KDB's strategic focus on high-tech advancements, digital transformation, and green energy initiatives to tackle global climate challenges. He expressed a strong desire for closer cooperation with Vietnamese companies in these areas.

He also revealed KDB's plans to establish a bank branch in Vietnam, aiming to share expertise and provide support for Vietnamese enterprises expanding into the global market. This would generate employment opportunities for local workers and stimulate economic growth.

Sung-tae contributed insights during the meeting. He highlighted IBK's commitment to supporting small- and- medium- sized enterprises (SMEs), with 80 per cent of their lending assets in South Korea dedicated to this vital sector. He stressed that IBK has consistently stood by SMEs during economic downturns, offering crucial assistance to help them overcome challenging times.

Currently, IBK operates branches in Hanoi and Ho Chi Minh City, and the bank is in the process of establishing a legal entity in Vietnam. With total assets in Vietnam amounting to approximately $1.5 billion, IBK actively provides loans to both South Korean businesses operating in Vietnam and local partners.

Sung-tae said, "IBK is eager to establish a legal presence in Vietnam, not only to support South Korean enterprises but also to extend assistance to Vietnamese businesses, particularly SMEs, across various regions. This commitment aims to foster job creation and promote cooperation between Vietnam and South Korea."

DPM Khai welcomed the proposals presented by KDB and IBK, and acknowledged that South Korean financial institutions have the most significant presence among foreign organisations in Vietnam.

“The State Bank of Vietnam is processing licence applications for new entities, including those from six South Korean banks, including IBK and KDB,” he said. “The Vietnamese government, under the guidance of the prime minister, would provide specific instructions to address these matters effectively in the near future.”

Vietnam's continuous pursuit of economic restructuring, particularly within its banking sector since 2011, aims to enhance the quality and efficiency of the entire financial system.

The Vietnamese government welcomes the participation of foreign financial institutions, especially in addressing challenges within weaker banks. This presents an opportune moment for South Korean financial institutions seeking to establish new commercial ventures in Vietnam.