The retail banking and consumer finance sector in Vietnam has historically been extremely limited, with the majority of earnings derived in recent years from the thumping corporate lending business. But low margins are tempting the majority of banks in Vietnam, local and foreign, to venture into the high-yield consumer finance and retail banking market.
The extremely underdeveloped Vietnamese retail banking business is unusually well-positioned for exceptional growth. In an 85 million-strong population, just 15% of individuals are believed to have bank accounts - and even this figure is disputed by local bankers. Although the Vietnamese government has mandated that all state employees must have their salary deposited into a bank account, bankers believe that the number of active bank account holders who use the service on a regular basis may still be as low as 10%. The 'banked' population in nearby Thailand by contrast is more than 75%. Indeed, so under-saturated is the Vietnamese market that in 2006 the country had just 46 ATMs for every 1 million people, according to the Nomura Research Institute.