Lao Viet Bank, the new symbol of the special friendship between Vietnam and Laos
Born with the mission of being a payment bridge between Vietnam and Laos, after more than a quarter of a century, Lao Viet Bank has gradually become a supporter, meeting the investment needs of businesses of the two countries, contributing to fostering the special solidarity and friendship between Laos and Vietnam.
In the history of international relations from the past to the present, the special relationship between Vietnam and Laos is a typical example, a rare exemplary model of the strong, loyal, pure and effective bond between two peoples fighting for independence, freedom and social progress. The special relationship between Vietnam and Laos developed from the traditional relationship, the foundation of which was built by President Ho Chi Minh and cultivated by him, comrade Kayxon Phomvihan, comrade Souphanouvong and generations of leaders of the two Parties, two States and peoples of the two countries. Having gone through many challenges, sacrifices and hardships for the independence, freedom and happiness of the two peoples, the relationship between Vietnam and Laos has become a law of survival and a source of miraculous strength leading to many great victories of the people of Vietnam and Laos in the cause of national liberation, in building and defending the country, and developing together in the direction of socialism.
In the new era, when international cooperation and connections between countries are increasingly growing, the friendship between Vietnam and Laos is increasingly developing and expanding comprehensively in all fields. However, the economic and trade relations between Vietnam and Laos are not really commensurate with the special friendship between the two countries. Import-export trade and investment activities are still very limited, not commensurate with the potential of the two countries and with the traditional friendship. From the above requirements, there is a need for a special and effective "bridge" in the field of economic, trade and finance to promote and develop the potential strengths of each country.
As a bank with the longest tradition in the system of credit institutions in Vietnam, always excellently completing the political tasks assigned by the Party, State and Government, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) was trusted and selected by the Government of Vietnam as the unit to carry out investment cooperation with Laos. From that orientation requirement of the State of Vietnam, on June 22, 1999, the Lao-Viet Joint Venture Bank was officially established from the cooperation between BIDV and the Lao Public Bank for Foreign Trade (BCEL), the leading state-owned bank in Laos. With its mission, Lao-Viet Bank is not simply a banking financial institution among credit institutions in Laos, but a special joint venture unit - both doing business and carrying out political tasks as a bridge between the two economies of Laos and Vietnam.
1. Requirements for payment connection between two economies
Immediately after the Investment Promotion and Protection Agreement and the Trade Agreement between the two countries were signed, the need for a payment bridge between the two economies was raised. In addition, the vivid reality of the ODA funding activities of the Vietnamese Government for the Lao Government; the increasingly bustling investment and trade activities between organizations, businesses and people of the two countries made the need for a safe and fast payment channel through banks between the two countries increasingly urgent.
That task was assigned by the two Governments to the banking sectors of the two countries to study and propose since the end of 1997. In early March 1998, during the official visit and working session of General Secretary of the Communist Party of Vietnam Le Kha Phieu in the Lao People's Democratic Republic, the Vietnamese banking sector sent representatives to join the accompanying delegation and had meetings and work with representatives of the Central Bank of Laos. Mr. Nguyen Trung Hieu - Deputy General Director of BIDV at that time joined the working delegation.
Immediately after that, following the direction of the Government, the Vietnamese inter-sectoral working group including representatives of the State Bank of Vietnam, the Ministry of Construction, the Ministry of Planning and Investment conducted a survey of conditions such as the legal environment, business environment... to establish a branch of a Vietnamese commercial bank in Laos. Mr. Nguyen Van Tan - Member of the Board of Directors of the Bank for Investment and Development of Vietnam participated in this special working group. 1 .
Based on the results of the actual survey, at the end of April 1998, the State Bank of Vietnam selected and assigned BIDV to research and develop a project to implement this policy.
Talking about this event, Mr. Trinh Ngoc Ho - General Director of the Bank for Investment and Development of Vietnam at this time said:
"Honored to be assigned the task, the Board of Directors and key staff of BIDV have thoroughly grasped the objectives, requirements and important significance of having Vietnamese banking activities in Laos. BIDV has continued to organize more specific survey delegations on the economic environment, investment, trade, banking activities in Laos and the practical economic cooperation, investment, exchange of goods, tourism and services between enterprises of the two countries. However, during the process of researching and surveying to develop the project, we realized that opening a BIDV branch in Laos is not the optimal solution and it is very difficult to complete the assigned task, so we need to find another solution. Fortunately, during the occasion of attending the IMF and WB Annual Meeting (October 1998), I proactively met and proposed to Comrade Chueang Sombounkhanh - Governor of the Central Bank of Laos about implementing a banking joint venture and asked the Governor to select a Lao state-owned bank to contribute capital to establish with BIDV. I am very We are pleased that the Governor supported and appointed the Bank for Foreign Trade of Laos (BCEL), the largest state-owned bank in Laos, to be a joint venture partner with BIDV.
BIDV reported and then the State Bank of Vietnam submitted a report to the Government and only two weeks later, on December 1, 1998, the Government approved the plan to establish a joint venture bank, instead of opening a BIDV branch in Laos. 2 " .
The agreement and support from the Governments and Central Banks of the two countries is a confirmation that BIDV's idea is suitable in the context of Laos's underdeveloped economic environment, as well as the fact that Vietnam's foreign investment law has not yet been issued, and the two countries only have an Agreement on Investment Promotion and Protection. The joint venture bank model will resonate with the combined strength of the two partners. For the Bank for Foreign Trade of Laos (BCEL), this is an opportunity to promote the strengths of a large state-owned bank with a network and understanding of the laws, business practices, market and Lao enterprises. For BIDV, this is an opportunity to promote the advantages of a bank with experience in serving investment and development, approaching enterprises that have and will have economic, trade, investment, import-export relations with Lao enterprises. Previously, BIDV was also very successful with the VID - Public Joint Venture Bank model, a joint venture with Malaysia since 1992.
1998 can be considered an important milestone to mark the cooperative relationship between the banking sectors of the two countries. On December 21, 1998, two important documents on cooperation between the State Bank of Vietnam and the Central Bank of Laos were signed: the Cooperation Agreement (later replaced by the Cooperation Agreement signed on March 2, 2000) and the Payment Agreement.
Since then, the cooperation between Vietnam and Laos in the banking sector has achieved very positive results. The State Bank of Vietnam has sent many officials to join the economic expert delegations of the Vietnamese Government to Laos to advise on macroeconomic policies; helped the Lao Central Bank compile intermediate and advanced textbooks on banking operations, develop teaching materials; provided long-term university training for Lao Central Bank officials; received delegations of Lao Central Bank officials to study and conduct surveys in Vietnam on banking operations issues. In addition, the State Bank of Vietnam also provided information, documents, and legal documents on mechanisms and policies to the Lao Central Bank for research and experience learning.
On the basis of that common cooperation, the relationship between the commercial banks of the two countries has also been rapidly promoted in many aspects: exchange of experience, technical cooperation and training in banking operations, and the peak is the joint venture and association of the Bank for Investment and Development of Vietnam and the Bank for Foreign Trade of Laos. This cooperation creates a significant driving force to promote the socio-economic development of each country.
2. Preparations for the establishment of the Laos - Vietnam Joint Venture Bank
Immediately after receiving the approval of the Government, within the framework of the visit and working session of the Lao banking delegation with Vietnamese banks, just two days after the Cooperation Agreement between the two banking sectors of the two countries was signed, on December 23, 1998, the Joint Venture Cooperation Memorandum between the Bank for Investment and Development of Vietnam (BIDV) and the Bank for Foreign Trade of Laos (BCEL) was signed, officially marking the "marriage" between BIDV and BCEL.
On January 7, 1999, in Hanoi, the 1999 Agreement on Economic, Cultural, Scientific and Technical Cooperation was signed between the Governments of Vietnam and Laos. The Agreement stated: "Assign the banking sectors of the two countries to coordinate in selecting partners to study the project of establishing a joint venture bank in each country." 3 .
Since the above opening events, the two joint ventures have been urgently preparing for the establishment of a special financial institution. The preparatory committee for the establishment of the Joint Venture Bank was established. On the Lao side, the Deputy Governor of the Lao Central Bank - Mr. Phouphet Khamphounvong directly directed. On the BIDV side, the General Director Trinh Ngoc Ho directly directed.
From March 2 to 7, 1999, BIDV General Director led an inter-sectoral working group with members being experts from the Government Office, Ministry of Planning and Investment, Ministry of Finance, Banking Department, International Relations Department of the State Bank of Vietnam to contact and work with Lao authorities to discuss and agree on key points for the establishment of the Joint Venture Bank.
On March 6, 1999, at Laos Plaza Hotel, with the presence of the Governor of the Central Bank of Laos, the Ambassador Extraordinary and Plenipotentiary of the Socialist Republic of Vietnam in Laos and representatives of ministries, branches, Lao Television, Mr. Phouphet Khamphounvong - Deputy Governor of the Central Bank of Laos on behalf of the Preparatory Committee for the establishment of the Lao - Vietnam Joint Venture Bank and Mr. Trinh Ngoc Ho - General Director of the Bank for Investment and Development of Vietnam signed the Memorandum of Understanding on the establishment of the Lao - Vietnam Joint Venture Bank as a basis for developing the Project to prepare for joint venture activities and the Charter of the organization and operation of the Lao - Vietnam Joint Venture Bank.
During their working time in Laos, the delegation was received by Mr. Bounnhang Vorachith , Permanent Deputy Prime Minister of the Lao People's Democratic Republic - Chairman of the Laos - Vietnam Cooperation Sub-Committee. The Deputy Prime Minister welcomed the delegation's working trip, highlighted the important significance of the establishment of the Laos - Vietnam Joint Venture Bank, and expressed the Lao Government's support in creating favorable conditions for the Joint Venture Bank to soon be established and put into operation. 4 .
Immediately after that, to prepare for the establishment and immediate operation of the Joint Venture Bank, the Bank for Investment and Development of Vietnam organized many seminars with the Lao Foreign Trade Bank on building business processes, organizational models and technology transfer, along with preparing facilities, headquarters, computers, transmission lines and key personnel for the Joint Venture Bank...
Anticipating a large amount of preparatory work to establish a bank, especially the first time BIDV invested and operated abroad, in the Memorandum of Understanding signed in Vientiane on March 6, 1999, the two joint venture parties planned to strive to launch the Joint Venture Bank by the end of 1999.
However, the opening plan was later pushed forward faster than expected. Mr. Trinh Ngoc Ho - General Director of the Bank for Investment and Development of Vietnam recounted:
"On a day in early May 1999, BIDV and BCEL were honored to be assigned the task of organizing the opening of the Joint Venture Bank in mid-June 1999. This was not only a practical task to welcome President Tran Duc Luong and the delegation of our Party and State to the official visit to the Lao People's Democratic Republic, but also a concrete task expressing the determination to promote the traditional solidarity - special friendship - comprehensive cooperation between Vietnam and Laos. It was only a month since I directly received this task from the Permanent Deputy Prime Minister and Governor of the State Bank Nguyen Tan Dung. With determination, mobilizing the strength of the BIDV system, closely coordinating with the other side, taking advantage of the attention, direction and support of the Government, the State Bank, ministries and branches of the two countries, we "simultaneously and rapidly attacked" on all aspects from building - submitting for approval of legal basis, building organizations, arranging staff training, contributing capital, purchasing equipment. banking technology equipment, house rental - construction, renovation of a three-story house in Vientiane to have a working office for the joint venture " 5 .
On May 18, 1999, at the Government Guest House, Hanoi, the Bank for Investment and Development of Vietnam and the Bank for Foreign Trade of Laos signed a joint venture contract to establish the Lao-Vietnam Joint Venture Bank. According to the contract, the Lao-Vietnam Joint Venture Bank has a charter capital of 10 million USD, the capital contribution ratio of the two parties is 50:50, each party contributes 5 million USD.
Thus, just over a month after Decree No. 22/1999/ND-CP, dated April 14, 1999 of the Vietnamese Government on foreign investment was issued, BIDV became the first bank in the Vietnamese banking system to invest abroad, impressively opening BIDV's process of reaching out to the region and the world in the following years.
Regarding the history of special relations between Vietnam - Laos, Laos - Vietnam, the event of the Bank for Investment and Development of Vietnam and the Bank for Foreign Trade of Laos signing a joint venture contract is considered a beautiful highlight on the path of the two countries joining hands to build and develop the country in the new era and is respectfully recognized by the two Parties. 6 .
To quickly put the Joint Venture Bank into operation, all preparations regarding facilities, capital sources, etc. were directed by both sides of the joint venture and the two Governments to be carried out with a spirit of speed. The Bank for Investment and Development of Vietnam sent an advance team with two engineers in construction economics and information technology, Mr. Pham Quang Tung (officer of the Appraisal Department, now a member of the Board of Directors of BIDV) and Tran Sy Cu (officer of the Information Technology Department) to join officers of the Lao Foreign Trade Bank to directly supervise and accept each part of the headquarters construction, network installation and information technology equipment. Mr. Pham Quang Tung recounted:
"At that time, the preparation for the establishment of LVB was identified by BIDV as a special "campaign". To meet the opening schedule, Vietnamese officials (BIDV and engineers and workers of Vinaconex) did an admirable job by renovating the house at 4-6 Lanexang Avenue into a spacious, modern, fully equipped three-story bank headquarters in just 53 days and nights. An unforgettable memory during the days of repairing the LVB headquarters was when the Lao Prime Minister came to visit and inspect the project. Because they were not notified in advance and introduced, the Vietnamese brothers did not know that the Prime Minister was visiting, and continued working normally. The "strange guest" visited all floors of the construction site, asked about and encouraged the Vietnamese workers, and reminded them to try to complete the project on schedule. The next morning, when I went to work at the BCEL headquarters, I accidentally saw the photo of this "strange guest" in the newspaper. When I asked the Lao brothers, I found out that it was the Prime Minister of Laos." 7 .
After 26 years of operation, from a joint venture - a young financial institution in the banking and finance industry with a very new history of Lao PDR, overcoming difficulties, Lao - Vietnam Joint Venture Bank has become a strong institution, a familiar brand to the Lao market and businesses of Vietnam and Laos.
With an initial charter capital of 10 million USD, 22 staff, 03 branches in Laos and Vietnam, LaoVietBank has gradually grown, to today LaoVietBank has become one of the leading banks in Laos, ranked 02nd in charter capital, 06th in total assets, a network of 07 branches, 14 transaction offices spread across the developed provinces of Laos, the number of staff is 450 people, more than 20 times higher than the first days of establishment. LVB also holds the position of the largest bank among Vietnamese banks in Laos.
26 years of construction and development, overcoming the difficulties of a special joint venture, LaoVietBank has continuously grown, successfully completed the great political mission and task entrusted by the two Parties and Governments, in addition to excellently performing business tasks, actively contributing to the economic development of Laos.
