ING's IGA unit advises second Vietnamese bank

ING wholesale banking's institutional and government advisory group has received its second major mandate in Vietnam in the past two years, announcing that it will support the transformation of state-backed Bank for Investment and Development of Vietnam (BIDV). The mandate follows the 2003 commencement of a two-year advisory assignment for the Bank of Foreign Trade of Vietnam (Vietcombank), which like the BIDV assignment, was a World Bank-sponsored project. According to ING, the BIDV mandate will be similar to its previous work with Vietcombank, but unlike its previous assignment in the country, will only last for eight months. The brunt of the project will focus on BIDV's overall management structure and strategic direction. Also under the microscope will be the state-backed bank's treasury, risk management, asset liability management, internal audit, marketing, information technology and customer relations functions. In addition, ING will also provide technical advice and training programmes to enhance efficiency within the Vietnamese bank.

"We will work with management and staff of BIDV to maximize the impact of our efforts and to make sure that our recommendations can be implemented," says Sjoerd van der Voet, head of ING's institutional and government advisory group in Asia. "In addition to implementation of a change programme, we usually place a heavy emphasis on knowledge transfer from ING to the client institution. On-the-job training and tailored training sessions will aim at embedding the changes into the institution's day-to-day operations." This project is part of the second phase of the World Bank's restructuring plan and part of the Vietnam government's plan to overhaul the fledgling banking system and adopt international standards. "There is still a lot of work to do to bring Vietnam's state-owned banks to best international practices and we are encouraged by the enthusiasm and willingness to change of many of the people we have worked with," stresses van der Voet. "We are also encouraged by the willingness of the Vietnamese authorities to seek advice as to the structure of the banks operations and leverage international best practice to rapidly modernize the sector."

According to van der Voet, the main challenge in overhauling BIDV's current state will be the implementation of change and the ability of bank employees to forget the mistakes of the past. "As in most of our projects, the main challenge for BIDV management and staff is not to learn how to do things in a new way, but to forget how things were done in the past," he suggests. "There are still forces in Vietnam that resist change and our challenge is to convince these forces that change is necessary for Vietnam's state-owned banks to survive under increasing domestic and foreign competition."

As part of ING's wholesale banking division, van der Voet's group typically undertakes financial sector advisory and restructuring projects and interim management assignments for up to three years. The majority of projects mandated to the group comes from commercial banks, insurance companies, sovereign governments and international financial institutions like the EU and World Bank. Outside of Vietnam, the group is currently involved in Indonesia, Malaysia, Mongolia and Sri Lanka, dealing predominately with banks and insurance companies. In 2005, members of the ING team have also worked on and completed projects for Thailand's Krung Thai Bank and Taiwan's Chang Hwa Bank.