Both domestic and foreign banks have entered upon a new race to expand their networks with a lot of new branches opened recently.

HDBank, for example, put eight branches in HCM City, Hanoi, Ba Ria-Vung Tau, Dong Nai and Binh Duong into operation from August 14-19, raising the total number of its branches to 42 across the country. However, the bank is still planning to open more branches in big cities and provinces. It hopes to have 70 retail branches by the end of 2009, to, the bank says, more easily access clients.

Similarly, VietBank opened five retail branches in Hanoi and HCM City from August 14-19. It now has 18 operational retail branches in six cities and provinces: HCM City, Hanoi, Hai Phong, Da Nang, Can Tho and Soc Trang. If VietBank’s plan is fulfilled, it will have 43 retail branches in six provinces and cities, or 25 new branches, by the end of 2009.

Sacombank now has 274 retail branches across the country, while it still plans to open 26 new branches by the end of 2009. The bank has a representative office in China and branches in Laos and Cambodia. From the beginning of the year to mid May 2009 alone, Asia Commercial Bank opened eight more branches. It still plans to open 40 more branches this year. However, the bank plans to recruit only 600 additional officers to save expenses.

Banks well know that they cannot expect immediate profit from new branches because of the impacts of the global financial crisis and the recent State Bank of Vietnam’s policy on tightening credit.

According to Sacombank, in principle, a new retail branch will not bring profit to a bank until six months after the first day of operation. However, the situation may be different in the current difficult conditions. In 2008 and the first seven months of 2009, many new retail branches of Sacombank did not have clients.

Deputy General Director of DongA Bank Nguyen Thi Ngoc Van said that new branches would not bring profit until after a year of being operational.

Deputy General Director of VietA Bank Pham Ngoc De also said that he does not expect profit to come from the new branches soon as his bank still has to spend big sums of money on renting business premises, labour and management costs. However, De said that in some cases, new retail branches could bring profit after seven months of operation.