The State Bank of Vietnam has issued a confirmation letter to the Industrial Bank of Korea (IBK), signalling the official start of the review process for the Korean policy lender’s long-pending subsidiary application, The Korean Herald has reported.
Key details
- IBK first submitted its application nearly eight years ago, showing how rare and drawn-out the process of establishing a foreign banking subsidiary in Vietnam can be.
- IBK already operates two branches (Hanoi and Ho Chi Minh City), but a full subsidiary allows for broader business activities, greater autonomy, and potentially more favourable treatment under Vietnam’s regulatory and capital adequacy framework.
- Notably, this is the first such move since Singapore’s UOB received approval in 2017. If successful, IBK would join Shinhan and Woori as the third Korean bank with a full subsidiary in Vietnam — giving Korea parity with Malaysia in subsidiary presence.
- The Korean Development Bank (KDB) also received approval to open a branch in Hanoi in May after six years of waiting.
- However, KDB was only approved for a branch, not a subsidiary
Why it matters
These approvals mark a rare opening in Vietnam’s tightly regulated banking sector and could signal an opening of the sector more broadly.
Moreover, IBK’s entry could boost SME financing, with KDB providing greater capital access for large-scale infrastructure.
See also: Banking in Vietnam 2025: Account Ownership, Mobile Money & Key Players