Banks and securities companies hurry to the altar

VNStockNews.com - Vietnam’s securities companies, with thousands of investor clients, are being avidly courted by commercial banks, reports Thoi bao Kinh te Saigon.

Securities companies happy to be wooed

According to the chairman of a securities company, it used to be the case that securities companies gave priority to strategic partners who paid the highest prices for stakes and committed to hold shares for the longest time.

Now, he says, the criteria are quite different. The stock market is recovering rapidly and securities companies want to launch more services and expand market share. Therefore they need partners with powerful financial capability and good access to wealthy clients.

“Those must be commercial banks,” he said.

Dong Duong (Indochina) Securities Company (DDS) has decided to increase its chartered capital from 125 billion dong to 300 billion dong in 2009. A lot of domestic and foreign businesses have hinted that they want to invest in DDS.

Vu Tran Duong, a senior officer of the firm, says that DDS will choose foreign partners also operating in securities field. For domestic partners, DDS will favor commercial banks.

Duong believes that partnership with banks will benefit his company because banks can provide services to investors, thus helping DDS meet the requirements of its clients. Further, with advantages in capital, technology, large network and finance management experience, banks can help the company expand its operations.

Duong stressed that cooperation between securities companies and banks is “indispensable,” because they can share clients while their operations complement each other. His company is now cooperating with five banks. Tin Nghia Bank is the comprehensive partner that provides different service packages to DDS’s securities investors.

DDS plans to open more branches in HCM City and Hanoi on the back of Tin Nghia Bank’s existing network.

Banks are eager suitors

A deputy general director of Sen Vang Securities Company, Nguyen Ngoc Truong Chinh, said the banks are just as eager to cooperate with the securities companies.

Small and medium banks need to expand market share and need more clients. It takes at least one year and a lot of money to open a retail branch. However, the banks can grow more cheaply by investing in securities companies and sharing access to their clients.

CEO Hoang Van Toan explained Trustbank’s decision to buy a strategic share, 11 percent, of Dai Viet Securities. Dai Viet has 18,000 investors’ accounts and daily trading volume of 100 billion dong per day. Trustbank’s 60 retail branches nationwide which begin booking orders for Dai Viet Securities.

It’s the same for most other commercial banks – they either have their own securities subsidiaries or have bought big stakes in securities companies.

“Securities companies with the average daily trading volume of hundreds billions dong are the big opportunities for banks to acquire big capital at low cost,” agrees the General Director of Kien Long Bank, Truong Hoang Luong. His bank is on the prowl for a suitable partner.