Singapore-headquartered United Overseas Bank (UOB) has announced the appointment of Victor Ngo as new CEO of its Vietnamese franchise, effective June 01.
Bringing to the role over three decades of international experience in banking, Ngo assumes his new post following leadership positions across UOB’s Group Audit and Group Compliance Divisions. He joined the bank in 2004 and succeeds Harry Lo, who is returning to Singapore to lead the banking group’s Non-Financial Risk Management effort.
The announcement pointed to Ngo’s contribution to UOB’s effort as the first Singapore bank to establish a foreign-owned subsidiary in the Vietnamese market, in 2017, before it commenced operations from July 2018.
Speaking to FinanceAsia, Ngo offered his thoughts on the local market as an attractive destination for international opportunity, following the reopening of the country’s borders in March this year.
“Foreign Direct Investments (FDI) rose 9.2 per cent year-on-year to $31.2 billion in 2021, as companies look to diversify their supply chains and to position themselves for a post-pandemic recovery.”
With ongoing supply chain disruption exacerbated by continued geopolitical tensions, many manufacturers are accelerating their adoption of a ‘China plus One’ strategy. Moving away from sole reliance on China as a production hub, firms are redirecting their business elsewhere, including to Southeast Asia’s ‘Tiger Cub Economies’.
“This has enabled Vietnam to capture a substantial amount of the production expansion from its regional peers, with its conducive foreign investment policies and robust infrastructure support and development,” Ngo explained.
A key strategic growth market for UOB, in September last year the bank reaffirmed its long-term commitment to Vietnam through an increase in charter capital from VND 3 trillion ($129.37 million) to VND 5 trillion.
Since its pledge of a Memorandum of Understanding (MoU) with Vietnam’s Foreign Investment Agency (FIA) in April 2015, UOB has assisted more 200 companies expand into the region, creating more than 20,000 jobs and bringing over S$4.6 billion ($3.34 billion) to the market.
“Working closely with the FIA, we aim to serve as a one-stop service for foreign companies looking to expand into Vietnam by offering in-market insights.”
Signed in November 2020 and taking effect from January of this year, Vietnam is one of the key beneficiaries of the Regional Comprehensive Economic Partnership (RCEP) trade agreement. Ngo expects the pact to drive additional FDI into Vietnam and the wider region.
“Macroeconomic stability along with competitive advantages in terms of labour, improved educational standards and favourable demographics, are the key drivers of attractiveness of Vietnam’s manufacturing sector to global firms, driving the growth in exports.” He added that the government’s move to relax Covid-19 restrictions has helped improve overall business sentiment.
At the end of May, S&P Global Ratings upgraded Vietnam’s long-term sovereign credit rating to BB+ with a stable outlook. “This helps to reduce the cost of capital not only for Vietnamese government but also for Vietnamese companies tapping on the bond market for liquidity.”
In terms of challenges, he highlighted interest rate rises, inflation due to rising fuel prices, and global supply chain disruptions. “Businesses need to manage high operating and borrowing costs while sales volume and demand are still on the road to recovery to pre-covid levels.”
Regarding upcoming developments, Ngo is excited by plans to deepen the bank’s digital capabilities across wholesale and retail services. The bank was among the first international players to offer Application Programming Interface (API) services which allow access to information from the bank in a secure and cost-efficient manner. Through its recently established UOB Infinity platform, businesses can tap real-time payment services and obtain real-time notifications and payment status updates.
“UOB is investing up to S$500 million in digital innovation initiatives across ASEAN, including Vietnam, to drive innovation and speed to market and to enhance the digital banking experience.”
