Vietnamese commercial banks are opening new branches as a move to compete with international rivals since under World Trade Organization commitments, beginning on April 1, wholly foreign-owned banks are permitted in the country, local newspaper Vietnam News reported Thursday.

"The focus by foreign banks in big cities will create serious pressure on human resources and increase unstable credit growth," Nguyen Quang Trung, deputy general director of the Saigon Thuong Tin Commercial Joint-Stock Bank (Sacombank), said, noting that his bank has expanded its network to 159 transaction offices and branches in Vietnam. Sacombank is considering opening a representative office in Cambodia and China next year.

The Vietnam International Bank (VIB) is trying to double its present number of 60 transaction offices in 2008. The Ho Chi Minh City Housing Development Bank (HD Bank), besides doubling its current chartered capital from 1 trillion Vietnamese dong (62.5 million U.S. dollars) some time this year, plans to triple its branches to 33 throughout the country.

The boom of the Vietnamese stock market since late 2006 has helped local banks raise chartered capital easily. However, the State Bank of Vietnam plans to set up clearer criteria and stricter regulations to prevent people from establishing banks for the sole reason of making money on the bourse.

To compete with foreign banks, the State Bank of Vietnam, the country's central bank, is developing some state-owned commercial banks into economic groups which provide banking services, insurance, investment, securities brokerage and asset management.

The central bank has so far received eight applications for the establishment of foreign-owned banks from foreign financial institutions.