Banks expand networks to increase market share

Agribank has more than 2,200 branches and transaction offices across the country (Photo: Agribank)

It is estimated that 25 banks have more than 10,700 branches and transaction offices nationwide, mainly in big cities and provinces.

The State-owned Bank for Agriculture and Rural Development (Agribank), which is one of the oldest commercial banks in Vietnam with the largest total assets, currently tops the list with more than 2,200 branches and transaction offices across the country.

Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) follows with 72 branches, 260 transaction offices and more than 1,300 post offices that also act as the bank’s transaction offices after LienVietPostBank’s merger with the Postal Savings Services Company in 2011.

Next in the ranking is the Bank for Industry and Trade (Vietinbank), Bank for Investment and Development (BIDV) and Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank).

Though it is one of the country’s four largest banks in terms of total assets and outstanding loans, Vietcombank only ranks sixth on the list with only 500 branches and transaction offices.

Small banks with fewer than 100 branches and transaction offices include names such as Tien Phong Joint Stock Commercial Bank (TPBank), Petrolimex Group Joint Stock Commercial Bank (PGBank), Viet Capital Joint Stock Commercial Bank (Viet Capital Bank) and Bao Viet Joint Stock Commercial Bank (BaoViet Bank).

According to experts, the massive transaction network has brought many advantages to some banks in enabling them to reach more customers and increase brand recognition. However, since some of the networks are too large, the banks struggle to solve the problem of cost management.

In fact, some banks, such as TPBank and Orient Joint Stock Commercial Bank (OCB), have small networks but their profits are not small. The two banks only own about 75 and 120 branches and transaction offices, respectively, but their profits were high at VND1.02 trillion and VND1.3 trillion in the first half of this year, ranking in the top 10 in terms of profit and higher than big banks such as Sacombank, SHB, Vietnam Joint Stock Export Import Bank (Eximbank) or Sai Gon Joint Stock Commercial Bank (SCB).

Notably, though ranking sixth in terms of network size, Vietcombank is the most profitable bank in the country with estimated pre-tax profit of more than VND11 trillion in the first nine months of this year.