From commercial banks to wealth management firms, Korean financial institutions are seeking to bolster their presence in the fast-growing Vietnam market to drive growth as the industry slows at home. 

Korean lenders are rushing to expand their footing in the country as its economy has remained robust --with a growth rate of 6.68 percent in 2015 -- while their net interest margin tumbled largely due to the continued low key interest rate.

Shinhan Bank Vietnam, a subsidiary of Shinhan Bank, is set to operate in 18 locations -- the most as a foreign lender -- after getting approval from Vietnam’s central bank to launch four more branches this month, the bank said Tuesday.

"We will focus on expanding our local customer base. More than 90 percent of our some 400,000 customers are Vietnamese,” said Shin Dong-min, general director of Shinhan Bank Vietnam.

He added that the bank will beef up its retail banking business, which offers higher return than corporate banking products.

Of 10 Korean lenders that have made inroads into the Vietnam market so far, six are operating affiliates or branches in the country and four others have liaison offices.

Woori Bank, South Korea’s largest commercial bank by assets, is waiting for permission from the State Bank of Vietnam to transform its branch into an affiliate.

NongHyup and KB Kookmin Bank are also following suit to switch their liaison offices in Hanoi to branches.

Wealth management firms too are joining the Vietnam rush to find new revenue sources.

A group of leading asset management companies’ representatives including Kang Bang-cheon, chairman of Asset Plus, and Chung Sang-kee, vice chairman of Mirae Asset Global Investments, is visiting Vietnam to look into the capital market trend and meet with financial authorities, as well as to call for relaxed rules on investments.

In a bid to spur investment inflows, Vietnam plans to eliminate limits on foreign ownership in listed companies by allowing overseas investors to increase their stake to 100 percent from the current 49 percent. The decree will take effect in September.

Under the government’s plan, some 500 state-run companies will go public in the next five years and a derivatives market will be opened this year.

By Park Han-na (hnpark@heraldcorp.com)