Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade BCHUSD, Bitcoin and Cryptocurrencies

BUY & SELL BCHUSD | View BCHUSD News & Updates

Buy Sell BCHUSD, Bitcoin and Cryptocurrencies

High turnover of key personnel   2011-09-03 - SGT

This year witnesses a high turnover of key personnel at commercial joint-stock banks

Having experience in important positions for 14 years at such foreign banks as ANZ, Standard Chartered, ABN Amro and HSBC, Viet (name has been changed). is now holding a position of deputy general director at a medium-sized joint-stock bank. This change in mid-July this year struck people working in the banking sector because Viet has been hunted by many banks.

Viet’s boss, a well-known chief executive officer (CEO) at a foreign bank in Vietnam, said though foreign banks have an ideal and professional working environment, and high income, there will be a time when birds are mature enough to fly high and own a bigger sky. So, Viet’s option is not rare.

A wave of restructuring

In 2010, the owners of the Vietnam Prosperity Commercial Joint Stock Bank (VPBank), the Technological and Commercial Bank of Vietnam (Techcombank), the Vietnam International Commercial Bank (VIB), Maritime Commercial Bank (Maritime Bank) and Military Bank (MB) hired international management consulting firms like McKinsey & Company, and Boston Consulting Group to give advice on management and banking restructuring. They pinned high hopes on becoming the Vietnam’s leading banks and avoiding risks from being taken over when Vietnam’s banking market was forecast to face great changes. As a result, banks turned their operational models from vertical management to horizontal management, and power centralization in the headquarters, as well as creating senior and junior positions.

The newly restructured VPBank this year sets targets for raising its charter capital from VND4 trillion to VND5.05 trillion and total assets of VND80 trillion, a year-on-year increase of 34%. The plan also requires total capital mobilization and pre-tax profit to rise by 50%. To achieve such targets, the bank needs new personnel, and that is why tens of senior and middle-ranking staff members have been re-appointed.

After phase 1 of the restructuring consulting contract signed with McKinsey & Company, 30% of 7,000 employees of Techcombank have been changed. It is a great challenge for the bank.

Within one year, Maritime Bank appointed 12 deputy general directors who were born in the 1970s. Four of them have worked for foreign financial institutions, and five have moved from other banks.

After two years of operation, Tien Phong Bank has replaced all the top executives, from the general director to deputy general directors. It is noteworthy that they were middle-ranking and senior staff from foreign banks who were welcomed when the bank was established. At present, some have moved to other joint-stock banks and some returned to foreign banks.

Behind the departures

Joint-stock banks are now focusing on restructuring, strategies and management systems. Bank owners are giving first priority to risk management and modern management models. They realize that if the banks want to further develop, they must be more dynamic and more professional; otherwise, they will be taken over, sooner or later. “The change in core values always attracts banking personnel to carry out new goals. Such a change is natural with certain pain, but in fact, it is a good change because the banks seem to be more dynamic and business results better,” Viet said.

According to a deputy board chairman of ABBank, another reason for the above move is that economic depression causes a severe pressure on the banking market. Financial institutions need those who can help overcome the crisis and achieve better business results, but require more sacrifice of benefits and more devotion from them. Such changes will surely lead to disputes between boards of directors and management boards, and those who have to quit are not the owners. Since early this year, Southeast Asia Commercial Bank (SeABank) and Bac A Bank have replaced tens of key personnel because the employees did not satisfy the employers.

Most of the breakups come from disagreements on viewpoints and working methods between owners and the management boards. A deputy general director who has just left a joint-stock bank said that the board of directors often intervened deeply in the jobs of the management board. According to the professional administrative criteria, the bank’s management board has the right to make decisions, and the board of directors should monitor and evaluate these decisions instead of doing business together with CEOs.

“CEO at a domestic bank sometimes does not know whether they are a CEO or not. Therefore, a senior employee should choose an appropriate board of directors for his/her own, and learns to interact effectively with the owners,” the vice chairman of ABBank said. The orientation of a manager and the viewpoint of an organization are sometimes different, so the most important thing is how to make them go hand in hand for the business to thrive.

The shortage of high quality key personnel is causing troubles to bank owners. In a market like Vietnam, banks are direct competitors of each other, and with the change of staff among the banks, they are well aware of others’ difficulties and shortcomings. The economy is forecast to endure hardships and personnel turnover may still continue.

Other news

Foreign investors eye property market   2011-09-03

Big carrot for petro complex   2011-09-03

Caution advised on bank reform   2011-09-03

Realty unsalable, trading floors shutting down in masses   2011-09-02

Compulsory reserve ratio increase not sharp enough to ease thirst for dollars   2011-09-02

Vietnam advisors ask govt to cut credit, M2 growth   2011-09-01

Luxury car sales rise strongly   2011-09-01

Vietnamese goods flooding world markets, but Vietnamese brands unknown   2011-08-29

Production stagnate, businesses cry for help, policy makers puzzled   2011-08-29

Stock market sees massive layoffs   2011-08-29

Experts: Foreign employment rule also impacts on local firms   2011-08-28

Increasing chartered capital remains difficult task for small banks   2011-08-28

Wood exports to China up, but businesses unhappy   2011-08-28

Dollar price on the rise, dual exchange rate mechanism comes back   2011-08-28