The State Bank of Vietnam (SBV)'s Governor Nguyen Van Binh has approvedSai Gon Thuong Tin Bank (Sacombank) opening a wholly-owned subsidiarybank in Laos.

This will pave the way for the lender to further expand services into neighbouring countries.

Thenew bank, named Sai Gon Thuong Tin Bank Lao Ltd. (Sacombank Lao), willbe headquartered in Vientiane's Hengboun Street and have a chartercapital of 39 million USD.

Sacombank Lao will be part of thetransformation of the existing branch of Sacombank in Laos, which wasopened in late 2008. Under Laos' regulations, foreign banks are allowedto establish a wholly-owned subsidiary bank only after a year of itsbranch being operational in Laos.

As per the SBV's approval,Sacombank will have to open its new bank in Laos within two years of theapproval. Sacombank Lao's duration of operation would be defined aslong as the mother bank was still operated. It would be allowed toexecute banking activities in Laos in accordance with Lao and Vietnameselaws.

In case Sacombank Lao received an investment licencegranted by Lao authorities, Sacombank would have to report to the SBVwithin 14 days before the launch of the new bank.

Earlier,Sacombank's Director Phan Huy Khang said that Lao authorities alsoapproved in principle for Sacombank to set up a wholly-owned subsidiarybank in Laos.

Sacombank is among Vietnam's first banks to dobusiness in Laos. The other Vietnamese banks, which operate in Laos,include Vietcombank, BIDV, Vietinbank and Sai Gon Hanoi Bank (SHB).

Apartfrom Sacombank, the central bank in January allowed Vietinbank to setup its wholly-owned bank in Laos by upgrading its existing branch.

SHB has also revealed its plan to open a wholly-owned unit in Laos.

Alongwith Laos, Cambodia is also a target market for Vietnamese banks,considering the current presence of BIDV, Sacombank, Agribank, MilitaryBank and SHB in the country and owing to its potential for tourism,mining, hydropower, oil and gas, and industrial plants.-VNA