Citigroup Brings Its Securities Services to Vietnamese Market

By Maria Trombly | Securities Industry News | March 15, 2006

Continuing its aggressive expansion in the Asia-Pacific region, Citigroup's global transaction services (GTS) unit has brought its custody and clearing services business to Vietnam. Anticipating significant growth, Citi had already offered securities trading and corporate cash management to Vietnam, but the addition of the new services as of Feb. 28 gives the New York banking company a stronger presence in the country's growing capital markets.

The receipt of custody and clearing license from the State Securities Commission (SSC), Vietnam's chief financial markets regulator, puts Citigroup's GTS on a par with the three other, Europe-based global custodians already in the country: HSBC, Deutsche Bank and Standard Chartered.

Currently, both local brokerage companies and foreign custodian banks offer custody services in Vietnam. Nguyen Van Dung, an official at the SSC's international relations department, says 13 local companies are in custody and clearing. Local investors are less averse to using one firm for both custody and investment banking services than are international investors, who usually prefer a foreign custodian, says Bui The Tan, director of securities business at Ho Chi Minh City-based Saigon Securities. Foreign custodian banks also provide services that local companies cannot: For example, Saigon Securities cannot handle foreign-exchange-related transactions without the help of HSBC, Bui says.

"We believe it is the right time to enter the market," says Margaret Dawson, Asia-Pacific head of Citigroup Securities Services. "We are seeing a significant increase in interest in Vietnam's capital market from our existing customer base, not just from Asia-Pacific but also from the U.S. and Europe." One reason is an explosion in the domestic stock market.

Additional coverage of Citigroup's Vietnamese expansion will appear in the March 20 issue of Securities Industry News.