Vietnam

Banking & Cash Management Challenges in South East Asia

Read more about Banking & Cash Management Challenges in South East Asia

Report date:

10 Jul 2025

Commentary

ASEAN (The Association of South East Asian Nations) has a population of over 600 million. This is more than the EU (450m) or the United States (340m). Its ten member states provide an impressive level of diversity, for history and culture, but also in politics, economic development and prosperity. The broad range of rules and approaches make it a challenge to manage treasury operations. But the population, economic dynamism and key role in global supply chains make it a crucial player in world trade.

The pattern on this call is not a surprise: Singapore is the most advanced and open economy in ASEAN. For most companies, it is part of their international cash pooling and sweeping mechanisms, along with Hong Kong, Australia and, to some extent, China. The Philippines, Indonesia, Malaysia and Thailand are open economies, but they generally require FX to be executed onshore, and cash pooling is usually via intercompany loans: automated sweeping is not allowed. Vietnam remains more difficult. Myanmar, Cambodia and Laos, continue to be highly regulated and short of hard currency.

Despite their FX restrictions, several countries have incentives for MNCs to set up Regional Treasury Centres (RTCs). These are usually able to transact outside the exchange controls – usually excluding domestic transactions.

Cash pooling: Singapore is the only country in ASEAN where cross-border cash pooling does not present any issues. Regional cash pools are usually based there or in Hong Kong. Most of the other countries allow domestic pooling and sweeping, though experiences vary. They typically do not allow automated cross border pooling, which is instead achieved by making intercompany loans, usually manually, and subject to various approvals.

Exchange controls: most ASEAN currencies are convertible, at least for goods imports. However, in many cases (again, excluding Singapore), the FX trade has to be executed onshore, with the USD or EUR then transferred outside the country. These trades are usually done from an offshore location. Thai baht can be paid out of Thailand, but the regulation is not ...

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Topics covered in this report:

ASEAN, Bank Relationships, Cash Pooling - cross border, Cash Pooling - domestic, Trapped cash, KYC, Cash Repatriation, FX, Regional Treasury Centre, Regulatory relationships

Service providers discussed in this report:

JP Morgan, DBS, Standard Chartered, Deutsche Bank, Citi, HSBC, Bank Ayudhya (MUFG), MUFG, Mizuho, Bank of America, Bank of PhilippineIslands, Bank Negara Malaysia, Bangkok Bank, Kyriba, Starfish Digital

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Treasury, FX & Banking in Vietnam

Read more about Treasury, FX & Banking in Vietnam

Report date:

10 Jul 2023

Commentary

There are some things in life which are always a fixed time in the future: the big joke about nuclear fusion is that it is 30 years away – and it was 30 years away back in 1970. Similar comments have been made about Vietnam’s economic potential: despite being hailed by many as the next China for economic growth, with its population of nearly 100 million people, and high levels of education and entrepreneurship, it has remained one of the more difficult places to do business and manage cash.

This call showed that the economy has made progress. Participants generally have businesses which are profitable and generating cash, and obtaining and remitting hard currency is not the major challenge it used to be. However, there is a lot of bureaucracy to be complied with, and it is not plain sailing.
Cash repatriation and trapped cash are issues. The only truly viable way of extracting cash from the country is via dividends – this means cash accumulates until the financial year has been closed, audited, and tax paid.
One participant has been involved in a situation where cash was repatriated via a prepayment of intercompany royalties – this required approval from the central bank.
Intercompany loans out of the country are

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Topics covered in this report:

Hedging FX, Bank Relationships, Intercompany loans, Cash Repatriation, Trapped cash

Service providers discussed in this report:

JP Morgan, Standard Chartered, HSBC, DBS, Citi, ANZ

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Regional Bank Relationships in Asia

Read more about Regional Bank Relationships in Asia

Report date:

2 Jun 2022

Commentary

The way treasurers manage banking relations provides a key insight into how they approach their job. This session was no exception – and we had the additional benefit of input from senior banker in Asia and Advisory Board member John Laurens, who shared his view from the other side of the fence.

Nearly everyone had the same goal: try to get the most efficient banking structure.
This nearly always involves a general preference for dealing with core international relationship banks over having many local relationships
However, one participant commented that local banks in Asia often have excellent technology and services – but it is difficult to get HQ to agree to go with them
In any case, there are many situations where local banks are still required, to support tax payments or local payment systems. China, India, Korea and Japan were the countries where this was most frequent.
In awarding business to banks, most companies tend to give a preference to the institutions who participate in credit facilities. Exceptions were made when justified by a specific service, but this could become an issue when credit needs increased.
Several participants have either recently restructured their banking relationships, or are currently doing so. Comments:
- It is very important to get the local team on board. They will usually accept the outcome and help if they own the decision, and can see clear benefits.
- The RFP process is useful, but it is important to carefully check the responses. One participant found that banks often tried to sell capabilities they did not yet have – it is important to focus on what they can deliver today. They also found it was beneficial to use...please sign in to continue reading

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