Banks cooperate with securities firms for expansion

A VPBank Securities’ trading office. Photo thoibaotaichinhvietnam.vn

HÀ NỘI — The strong development of the stock market, with rising retail investors and financial investment demand, has prompted many banks to cooperate with securities firms and fund management companies to add more cross-selling products. 

This is considered a solution for the parties to optimally exploit all potentials, and increase competitiveness and value. 

Saigon Commercial Joint Stock Bank (SCB) has just signed a cooperation agreement with Tân Việt Fund Management JSC (TVFM) in the field of providing product services, based on the principle of priority commitment to using each other’s products and services, ensuring effective competition in terms of quality and cost.

Accordingly, SCB is TVFM’s preferred partner in providing products and services in capital mobilisation transactions, domestic and foreign financial arrangements, investment transactions and investment cooperation. 

The bank also considers TVFM to be the preferred partner in performing investment, investment trust and asset management services for SCB and its customers.

Meanwhile, TVFM also signed a cooperation agreement with Tân Việt Securities JSC (TVSI) to cross-sell traditional products. In the next stage, the parties will proceed to develop specialised products in line with the business orientations of TVSI, SCB, and TVFM.

Nguyễn Cửu Tính, Deputy General Director of the Personal Finance Services Division of SCB, said that through the cooperation agreement, the bank will create superior product packages for investors and standardise the investment process of customers. Thereby, it can form accumulation packages with high-interest rates and outstanding efficiency, promising to provide customers impressive differences in products and services with stable profitability.

Previously, HSBC Việt Nam also confirmed the strategic cooperation relationship with VinaCapital Fund Management SJC in connecting retail investors with VinaCapital’s fund certificates. Initially, the cooperation is aimed at supporting HSBC Premier customers, opening up many opportunities for HSBC’s customers to access investment products.

Pramoth Rajendran, Country Head of Wealth Management and Personal Banking, HSBC Việt Nam, said that this is a good time for HSBC Việt Nam to introduce wealth management products, as customer demands’ standard is higher.

With strategic cooperation with long-time partner VinaCapital, the bank wishes to introduce to customers another investment channel to help increase assets. This is in line with HSBC’s strategy to open up new opportunities for customers, as well as support the development of the Vietnamese market.

In February, SSI Securities Corporation (SSI) also announced that it had successfully signed a loan contract with a limit of VNĐ10 trillion (US$437.1 million) with the Hà Nội branch of Vietinbank. 

This is the largest credit line contract of SSI to date with a joint-stock commercial bank in Việt Nam, promising to open up a more comprehensive cooperation direction in the future between the two financial institutions.

Another deal attracting attention recently is the return to the securities sector of VPBank through the acquisition of more than 97 per cent of stakes in ASC Securities Corporation and changed its name to VPBank Securities Company.

In the past, VPBank used to be the largest shareholder of VPS Securities JSC, the company with the largest stock brokerage market share today, however, in 2016, VPBank divested from the company and is no longer involved in the securities business.

As it is a traditional business of banks for a long time, it is understandable that many commercial banks expand their cooperation to promote investment development. 

The structure of stock investment of banks includes valuable papers, which mainly are debt securities including corporate bonds, government bonds and bonds of credit institutions. Currently, these services are mainly carried out by securities companies, which are subsidiaries or strategic partners.

Financial statements for the fourth quarter of 2021 and business results for 2021 of listed banks showed that investment securities services are bringing significant income to many banks, especially those that own securities companies.

For example, last year, Techcombank’s fee collection from investment banking (IB), the largest component of income from service activities, recorded at VNĐ3.6 trillion, up 32.8 per cent on-year. Its fees from bond distribution increased by 57.4 per cent and fees from other IB services rose by 66.7 per cent in 2021, as its Techcom Securities JSC (TCBS) continued to provide many new products and services to serve larger customer group which grew 30 per cent.

In 2021, securities trading, stock investment and long-term capital contribution also helped MBBank to earn nearly VNĐ1.7 trillion, up 75.3 per cent. VnExpress News