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Attendees, including Jang Min-young, President and CEO of the Industrial Bank of Korea (center right), Pham Quang Dzung, Deputy Governor of the State Bank of Vietnam (center left), and Lee Mi-yeon, South Korean Ambassador to Vietnam (fifth from left), pose for a commemorative photograph at the launch ceremony of IBK Vietnam Bank held in Hanoi, Vietnam, on the 13th (local time). / Hanoi Correspondent Jeong Ri-na

"On my way to the venue today, I paid close attention to the VinFast vehicles on the road. For a single fine automobile to run on the road, it requires the outstanding parts and technology of countless small and medium-sized enterprises."

At the launch ceremony of IBK Vietnam Bank held in Hanoi, Vietnam, on the evening of the 13th, Jang Min-young, President and CEO of the Industrial Bank of Korea (IBK), opened his congratulatory address by highlighting VinFast, Vietnam's homegrown automaker. Citing the numerous parts and materials suppliers supporting the auto industry, he outlined the business direction of IBK, a lender specializing in SME financing.

"The true engine driving Vietnam's economy likewise lies in this ecosystem of promising SMEs," Jang remarked. "Leveraging IBK's distinct expertise in SME financing, we will serve as a reliable pacemaker helping Vietnam's promising SMEs grow into global enterprises."

IBK held the official launch ceremony for its local subsidiary, IBK Vietnam Bank, in Hanoi on the 13th, nine years after submitting an application for local incorporation to the State Bank of Vietnam (SBV) in July 2017. Financial and business leaders from both nations attended the event, including SBV Deputy Governor Pham Quang Dzung, South Korean Ambassador to Vietnam Lee Mi-yeon, Korea Federation of SMEs Chairman Kim Ki-mun, Korean Chamber of Commerce and Industry in Vietnam Chairman Ko Tae-yeon, and Hanoi Korean Association President Yang Mo-se.

IBK secured full regulatory approval from the SBV on March 24 to establish and operate the local subsidiary. The formal license presentation took place in Hanoi in April at the Korea-Vietnam Financial Cooperation Forum, held on the occasion of President Lee Jae-myung's state visit to Vietnam. Capitalized at 7.3 trillion Vietnamese dong (approx. 378.9 billion won), IBK Vietnam Bank is headquartered at Keangnam Landmark 72 in Hanoi and is headed by its inaugural CEO, Park Kyung-il.

The launch brings the number of wholly foreign-owned bank subsidiaries in Vietnam to 10. Among South Korean lenders, IBK becomes the third, following Shinhan Bank Vietnam and Woori Bank Vietnam. South Korea now joins Malaysia as the nation with the largest number of 100% foreign-owned bank subsidiaries in Vietnam.

IBK's establishment of a local subsidiary carries particular weight because it comes against the backdrop of strict limits on new entries by foreign banks. Vietnam had not issued a new license for a wholly foreign-owned bank subsidiary for roughly nine years since approving Singapore's United Overseas Bank (UOB) in September 2017.

In August 2018, the Vietnamese government publicly announced a policy halting additional standalone foreign bank subsidiaries. At an M&A forum held in Ho Chi Minh City at the time, then-Deputy Prime Minister Vuong Dinh Hue stated that the government would encourage foreign lenders to acquire troubled local commercial banks rather than establish new standalone entities, intending to deploy foreign capital to restructure domestic financial institutions.

IBK opened a branch in Ho Chi Minh City in 2008 and another in Hanoi in 2013 to support South Korean businesses operating locally. However, expanding its network via a local subsidiary was critical to meeting the rising financial demands of Korean firms broadening their presence nationwide. Throughout the prolonged approval process, IBK received support from South Korean government bodies, including the Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and the South Korean Embassy in Vietnam.

South Korean Ambassador Lee Mi-yeon noted in her remarks, "Achieved under the Vietnamese government's stringent foreign bank licensing policies, this launch is a fruit borne of the dedication and efforts of IBK's leadership and staff, and an achievement that clearly demonstrates the robust Comprehensive Strategic Partnership between South Korea and Vietnam."

Noting that South Korea is Vietnam's largest investor and third-largest trading partner, Lee voiced high expectations for IBK's role: "For over 60 years, IBK has grown alongside South Korean SMEs as a leading policy financing institution, accumulating deep expertise and know-how. I am confident it will supply comprehensive, stable financing not only to Korean companies operating in Vietnam but also to competitive local firms, contributing to the shared industrial growth of both nations."

Vietnamese financial authorities likewise called on IBK to help expand local SMEs' access to financing and integrate them into global supply chains. SBV Deputy Governor Pham Quang Dzung stressed in his remarks that "while SMEs account for about 97% of all enterprises in Vietnam, they still face hurdles in accessing credit," underscoring IBK's 65 years of specialized experience in SME banking.

In particular, he urged, "We ask you to broaden support beyeond Korean firms to Vietnamese enterprises, especially those in supporting industries such as parts and materials, as well as firms participating in the supply chains of Korean investment projects. Through this, we hope you will help enhance the competitiveness of Vietnamese firms and enable their deeper participation in regional and global value chains."

This aligns with Hanoi's broader push to increase domestic participation in manufacturing supply chains established through South Korean investment. South Korea is Vietnam's largest source of foreign direct investment (FDI), with cumulative registered capital approaching $100 billion (approx. 134.3 trillion won). Bilateral trade between the two countries reached roughly $89.5 billion (120.2 trillion won) last year, according to Vietnamese official figures.

Leveraging its newly minted subsidiary, IBK plans to expand its branch network across major industrial complexes and step up financial services for Korean affiliates and local SMEs. In September, the bank obtained additional SBV authorizations covering foreign exchange transactions, international factoring, international payments, and integration into the SWIFT network, establishing the framework needed to scale up trade finance and cross-border settlement operations.

In Vietnam, foreign institutions including Shinhan Bank, Woori Bank, HSBC, Standard Chartered, and UOB have already established deep operational footprints. How IBK, as a late entrant, distinguishes its offerings in SME and supply chain finance is expected to determine its long-term foothold in the market.

"IBK Vietnam Bank plans to aggressively expand its local branch network around key industrial zones," said Jang. "We will work closely not only with South Korean companies operating in Vietnam, but also with competitive local Vietnamese businesses."

                                                                                                              Jeong Ri-na