In September 2019, the system of Vietnamese commercial banks (including Vietnam Bank for Agriculture and Rural DevelopmentAgribank) had more than 11,300 branches and transaction offices spread throughout the country, some banks had transaction branches overseas such as Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Saigon Hanoi Commercial Joint Stock Bank (SHB), Military Commercial Joint Stock Bank (MB), etc.
In the age of digital technology, the importance of existing bank transaction offices seems to be declining. However, the expansion of transaction offices was still considered by commercial banks to be necessary because that was one of the best locations for banks to promote retail activities and reach new customers.
According to the semi-annual financial statements of 2019 and the introduction of banks, as of September this year, Vietnamese commercial banks (including Agribank) had more than 11,300 branches and transaction offices spread throughout the country, some banks had foreign branches such as Sacombank, Vietinbank, Vietcombank, BIDV, SHB, MB, etc.
Agribank, Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank), Vietinbank, and BIDV were the largest transaction network, accounting for 50 percent of the total number of transaction points of the whole system. In particular, Agribank led with 2,232 transaction points, and this figure was double that of both VietinBank (1,113 transaction points) and BIDV (1,060 transaction points). The merger of Postal Savings Service Company in 2011 helped LienVietPostBank had more than 1,300 postal transaction offices, bringing the total number of branches and transaction offices of that bank to 1,253, ranking second in the whole system.
The huge transaction network had brought many outstanding advantages for some banks, such as reaching various customers, promoting retail banking. However, this indirectly raised the bank’s operating costs.
Many banks had few transaction points, but their profits were not modest. Vietcombank and Techcombank were the two banks gaining the highest profit in the first half of 2019, but their network was only on the sixth and nineth rank, with the number of transaction points of 537 and 313 respectively, not half that of Agribank. Notably, among the top 10 most profitable banks, TP Bank was modest with only 75 transaction points.
Along with the expansion of transaction points, banks now also aim to increase brand coverage across the nation and even worldwide. Agribank, Vietinbank, BIDV, Techcombank, LienVietPostBank owned the ‘huge’ number of transaction points covering all 63 provinces and cities nationwide. Vietcombank and MB also competed with the number of active cities up to 53 cities or Vietnam Maritime JointStock Commercial Bank (MSB) and SHB appearing in about 50 provinces.
Several other banks were not familiar with the majority of customers to appear in the operating areas of big cities such as Nam A Commercial Joint Stock Bank (Nam A Bank) (17 provinces and cities), VietNam Asia Commercial Joint Stock Bank (Viet A Bank) (16 provinces), Vietnam Export Import Commercial Joint Stock Bank (Eximbank) (22) (provinces), National Citizen Commercial Joint Stock Bank (NCB) (27 provinces), etc. Many other banks were present in 30 to 50 provinces.
Apparently, with the fierce competition in the market today, the calculation of the number and location to expand the network is a big question for banks. Because without careful consideration, possibly the revenue that branch brought is not enough to offset operating costs. Besides, meeting the strict demands of the State Bank of Vietnam showed that opening more transaction points was not easy. However, the race to expand the network of transaction points is progressing well and the development of each bank in terms of quality will be a big factor determining its network coverage.
