Citigroup links up with Vietnamese bank http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-09-11T040500Z_01_HKG161664_RTRIDST_0_FINANCIAL-VIETNAM-CITIGROUP.XML&rpc=66&type=qcna
Mon Sep 11, 2006
HONG KONG, Sept 11 (Reuters) - Citigroup Inc. (C.N: Quote, Profile, Research), the world's most valuable bank, has signed a cooperation agreement with Vietnam's Eastern Asia Commercial Bank to access the country's cards, consumer finance and corporate banking markets. Citigroup said it had signed a memorandum of understanding (MOU) with Eastern Asia, a mid-sized Vietnamese lender with $37.5 million in registered capital, to link its 1,400-point bank card network with Citigroup's global system.
The new partners will also work together on consumer finance and corporate banking projects as Communist-ruled Vietnam further embraces foreign banks and overseas players are attracted by the country's more than 7-percent economic growth.
A Citigroup spokesman declined to comment on whether the financial services giant will take a stake in Eastern Asia.
"We look forward to developing opportunities to work together with EAB in areas where we can combine our respective expertise and knowledge to develop further business in Vietnam," said Catherine Weir, Citigroup's chief executive of corporate and investment banking for ASEAN.
Citigroup won approval to set up custody and trade processing services for securities clients in Vietnam in February, which was around the same time Merrill Lynch (MER.N: Quote, Profile, Research) called the country a "10-year buy".
Merrill won approval to trade Vietnam-listed stocks as a foreign investor last month, and the country's gradual financial services liberalisation is part of its march toward entry into the World Trade Organisation, which may happen this year.
The market is not without its risks, as its stock market capitalisation is less than $3 billion and ABN AMRO (AAH.AS: Quote, Profile, Research) has recently been embroiled in a lawsuit alleging unauthorised employee trades. Yet Vietnam's Foreign Ministry has publicly talked down fears of a more unwelcoming environment for foreign firms and has pledged the ABN AMRO dispute would be resolved without any impact on overseas investment.
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