The Sai Gon Joint Stock Commercial Bank (SCB) this month has announced the appointment of Chen Yi-Chung (Jeremy Chen) as the new acting CEO, replacing a Vietnamese predecessor.
Taiwanese Chen, with over 20 years of experience working for Citibank Asia – Pacific, Standard Chartered Bank and other financial organizations, is expected lead the bank’s new transformation strategy for the next decade and make it one of the top profitable banks in the country.
Chen Yi-Chung (Jeremy Chen), CEO of SCB. Photo courtesy of SCB.
Techcombank, the nation’s largest private lender, appointed German Jens Lottner as its new CEO in August.
Lottner, with 28 years of experience in the financial world, has served in companies like McKinsey and Boston Consulting Group, and also has experience working in Asian markets. His last position was chief financial officer of Thailand’s Siam Commercial Bank.
Jens Lottner, CEO of Techcombank. Photo courtesy of Techcombank.
In June, Eximbank appointed its first foreign chairman, Japanese Yasuhiro Saitoh, who also has decades of experience in the financial sector.
Economist Nguyen Tri Hieu, an advisor to several banks, said by hiring new foreign personnel, domestic banks are showcasing a desire to improve their business standards and professionalism, which could result in growth in revenues and profits.
The relationships foreign leaders have with partners abroad could play a major role in helping a Vietnamese bank gain new customers, especially foreign direct investment companies who are looking to establish or expand in Vietnam, he added.
But working in Vietnam has its difficulties. One of the biggest challenges that a foreigner faces is the difference in the implementation of regulations between Vietnam and other countries, Hieu said.
In developed countries, regulations and laws are clear and have little space for interpretation, and all decisions from the board or the CEO must go through the compliance division, which serves to detect and address any illegalities and nonconformities.
But, in Vietnam, compliance with internal and external laws and regulations is low, and a foreign leader might feel uncomfortable, Hieu said.
Furthermore, hiring a foreigner is no guarantee of success. Can Van Luc, a banking expert and a financial advisor to the government, said in the past, some foreign bank personnel had been replaced by Vietnamese leaders after failing to make any major impact during their tenure.
“It does not matter much whether the leader is foreign or Vietnamese, what’s important is that he can transfer his knowledge and experience into growth for the bank.”
There are also concerns that senior foreign staff will create a financial burden. Hieu said a foreign CEO typically demands a salary of at least $10,000 a month, 1.5-2 times that of a Vietnamese peer.
The bank will also have to bear other expenses such as housing, transport and vacation for this CEO, he said, adding: “A bank needs to ensure that its existing regulations and work ethics are clearly established before hiring a foreign leader, otherwise the transition might not be fruitful.”