SINGAPORE - United Overseas Bank said on Thursday (July 20) that it has received an in-principle foreign-owned subsidiary bank (FOSB) licence from the State Bank of Vietnam.
The licence will allow UOB to broaden and deepen its support for businesses and consumers in the country.
UOB is the first Singapore bank to receive the in-principle licence.
The FOSB licence would enable the bank to extend its branch network beyond Ho Chi Minh City and to offer its products and financial solutions to businesses and consumers located in other cities in Vietnam.
The bank said it will also consider opening a branch in Hanoi, which it said is Vietnam's gateway to fast-developing cities in the north such as Hai Phong, Quang Ninh and Hai Duong.
UOB chief executive Wee Ee Cheong said that the in-principle licence marks the start of a new chapter for UOB in Vietnam.
"We have had a longstanding presence in Vietnam and, given our regional network, have over the past two decades helped our clients across Asia to identify and to invest in business opportunities in the country.
"With the in-principle FOSB licence, we look forward to helping our clients realise the business potential in Vietnam, which is one of the fastest developing countries in Asia."
Vietnam continues to be an attractive investment destination for many businesses, UOB noted.
Foreign direct investment flows to Vietnam rose to a new record of US$12.6 billion (S$17.3 billion) in 2016, up 6.8 per cent from the year before.
Since 2013, UOB has facilitated more than US$3 billion of foreign direct investment from Asia into Vietnam.
UOB's regional clients have invested in industries such as construction, real estate, manufacturing and fast-moving consumer goods, all of which have been helping to drive Vietnam's economic growth.
Mr Wee said: "With the FOSB licence, UOB will be able to support more Vietnamese companies in their domestic and regional growth by connecting them to cross-border opportunities throughout our extensive network."
UOB will also be able to deepen its support of more Vietnamese companies in their expansion plans through business advisory services and financial solutions such as trade finance, cash management and project financing.
To help nurture the development of Vietnamese financial technology startups, UOB will be able to draw on its expertise in the area of business development and innovation, the bank added.
One way in which it will do this is through The FinLab, a joint venture between UOB and SGInnovate set up to promote the growth of fintech start-ups in Asia.
UOB, in collaboration with The FinLab, will organise knowledge-sharing and networking sessions between promising Vietnamese start-ups and potential investors and industry experts.