For instance, the An Binh Commercial Joint-Stock Bank has opened 11 branches and transaction offices in Da Nang and the provinces of Lang Son, Nghe An, Binh Duong and Gia Lai.
Bac A Bank, by the end of last quarter, had expanded to include 100 transaction offices in 20 province and cities. TP Bank also plans to open more offices in provinces and cities nationwide.
A leader from An Binh was quoted as saying in Nguoi Lao Dong (The Labourer) newspaper that expansion was one of the most important steps in becoming a leading bank in the retail market.
An expert told the newspaper that estimated growth of the national credit market this year would be 17-18 percent against last year, if growth increases by 3 percent per month in the last few months.
He said this was a good time for banks to expand and introduce promotions to reach their year-end targets.
As the banking system is too small to fully meet demand, expansion would improve service quality at banks, he added.
The representative from An Binh Bank said there was strong demand for bank expansion, as this is a traditional channel to approach customers in all regions of the country.
Moreover, demand for lending at the end of a year is very high, prompting banks to expand to serve more customers.
However, with the opening of more branches and transaction offices, risks can increase as customers worry that service quality and technology will be inadequate. Human resources and management skills may not be ensured as well.
Experts, however, said there was no need for concern as regulations on controlling expansion in the banking sector, in which banks must show profits and have no more than a 3 percent bad-debt ratio, would lower the risks.
Bank expansion will help improve quality and competitiveness as well as increase each bank’s market share, according to experts.