“Knocking on the door” of the most important market of Europe
Given the increasingly rapid and deep global economic integration, the expansion of an overseas network is the objective of many companies and banks. According to Focarelli and Pozzolo (1999), the more efficient banks, the more likely they are to go abroad.
In Vietnam’s financial market, VietinBank has a large network covering 63 provinces and cities directly under the central government of Vietnam, including 1 Processing Centre in Hanoi, 160 branches, over 1000 transaction offices and saving offices; 1 representative office in Germany, 2 representative offices in Da Nang and Ho Chi Minh City; 1 Joint venture bank (Indovina Bank); 6 subsidiaries; and 3 administrative units. In addition, the Bank has established a correspondent relationship with over 900 banks in over 90 countries and territories worldwide. To date, the Bank’s ownership structure is as follows: 80% owned by the Vietnamese Government, 10% owned by International Finance Corporation (IFC) and the remaining 10% by other shareholders. In the coming time, VietinBank continues to sell 15% of its capital to the Bank of Nova Scotia – one of the 10 leading banks in Canada and elsewhere.
Given the strategy to become a strong and highly competitive banking and financial group, with the efforts to reach overseas market to gather experiences, knowledge, new opportunities and challenges for integration and development, VietinBank has selected Germany as the first location to set foot on by opening of a Representative Office in Frankfurt (Germany) in April 2010 and launching its first branch also in Frankfurt on 6 September 2011.
Germany is the most important market in Europe, which constitutes 20 percent of Europe"s GDP (EU-27) and is home to 16 percent of the total European Union (EU) population. The UNCTAD World Investment Prospects Survey 2009-2011 confirms Germany"s reputation as one of the most attractive business locations in continental Europe. This is then confirmed by Ernst & Young’s study on the attractiveness of the European economic area (2010), which shows that Germany is the number one business location in Europe. The “Global Competitiveness Report 2010–2011” issued by the World Economic Forum lists Germany in fifth position worldwide.

Germany is an important partner of Vietnam in development cooperation with numerous support policies in such areas as health care, environment, technology transfer and career training. Recently, Germany has kicked off a number of new investment projects in Vietnam in respect to industry, environment protection and clean energy production.
According to statistical data, Germany is the biggest trade partner of Vietnam in the EU, accounting for over 20% of Vietnam’s exports to the EU and over 25% of Vietnam’s imports from the EU. Although Vietnam is experiencing trade deficit in trade relations with many countries, the country is gaining trade surplus in trade relations with Germany with increasing value over the years.

Bilateral relations between Vietnam – Germany in the period 2001-2010. (Source: General Office of Statistics)

Confirming strength in international market
The launching of VietinBank’s branch in Germany is a special event, marking a new step of development of VietinBank in particular and the Vietnamese banking sector in general in the process of international integration. With the determination to deeply and intensively integrate with the global economy, the opening of the first branch of a Vietnamese bank in the biggest financial centre of Europe andelsewhere is a very important step in this direction, asserting the position and courage of Vietnam in general and VietinBank in particular in the international market.
VietinBank – German Branch will provide all banking products and services with advanced technology and professional staff. The branch will provide all products and services allowed by BaFin, including but not limited to deposit, loan, trade finance, money transfer (according to Artice 1 (1a) item 2, sentence 6 of the German Banking Law) and card payment services.
The opening of the VietinBank branch in Germany is a message of cooperation and fair treatment between member countries of the World Trade Organization. Vietnam joined the WTO in 2007 and the country has opened its investment environment for banks and companies worldwide, including Germany. Therefore, the presence of a Vietnamese bank in Germany is the respect of commitments and fair treatment of other member countries toward Vietnam.
Given the trade relation potential between Vietnam and Germany, being sustainable and developed over the years, VietinBank German Branch will contribute to promoting payment of trade transactions between the two countries. This will also help overseas Vietnamese to do businesswith a Vietnamese Bank in a big financial centre, making them prouder of their motherland. This also serves as an information channel for the overseas Vietnamese and promotes an increased support for their country.
Surely, Vietinbank Germany Branch will help VietinBank realize its commitments with investors and customers in diversifying operations, reducing risks, increasing service fees, improving efficiency and contributing to improving the position and image of VietinBank in the international market.