The total outstanding loans could reach VND1.3 trillion (US$61.9 million) by the end of this year, general director Tay Han Chong said.— Photo saigondautu

Chong told a press briefing held in HCM City that 2013 continued to be a difficult year for the banking sector, but MDB has seen satisfactory business this year thanks to credit growth in these two groups.

As of November, agriculture and rural credit growth had risen by 34 per cent year-on-year with a bad debt ratio of under 3 per cent.

The total outstanding loans could reach VND1.3 trillion (US$61.9 million) by the end of this year, he said.

Meanwhile, government employee loans have increased 125 per cent compared to the end of last year with bad debt ratio under one per cent and outstanding loans expected to reach VND1.4-1.5 trillion ($66.6 -71.4 million).

These two groups accounted for 62 per cent of MDB's current lending portfolio, Chong said.

For 2014, the bank plans to develop and exploit services and products targeted to SMEs, the self-employed segment, cluster markets and household businesses, he said.

He said focusing its development on these groups is expected to help MDB solidify its position in the market and provide the foundation for its long-term business strategy.

Before taking over as MDB's general director a year ago, Chong had worked for seven years with the United Overseas Bank in Singapore, Malaysia and Thailand and for five years at Citibank Singapore as deputy chairman and director of Capital Resources and Investment Business Segment.

Liberalise further

On the occasion of completing a year on his Viet Nam assignment, Chong shared with Viet Nam News his views on the challenges facing the domestic banking sector.

He said Viet Nam's banking sector lags behind other countries in the region like Thailand or Singapore because of many factors, but highlighted an inadequate legal framework and corruption as main hindrances.

There are positive signs in the Government's bank restructuring policy, but the most important thing is that the State Bank of Viet Nam should liberalise the banking sector further to promote its development, Chong said.

He said Viet Nam also needs to come up with favourable policies to attract foreign investment into the banking sector.

Bui Kien Thanh, a banking expert, said that the hiring of foreign CEOs for Vietnamese banks is an "inevitable" development, as the domestic banking sector needs international experience and expertise at the moment.

However, foreign CEOs also face many challenges in understanding the local business culture, business risks in the local context, the company's internal structure and the functioning of its management cadre.

The ability of foreign CEOs to adapt to the local environment will decide the success of local banks, Chong said.—VNS