ING Wholesale Banking (ING) has signed a memorandum of understanding to establish a corporate finance cooperation with Vietcombank Securities Company Ltd (VCBS), the securities and investment banking arm of Bank of Foreign Trade of Vietnam (Vietcombank), one of the countryÆs five main state-owned banks.

ING will help develop and promote investment banking in the country, having previously provided technical assistance to Vietcombank.

"This cooperation comes as Vietnam is seeing burgeoning foreign direct investment and as the country takes large steps towards its acceptance into World Trade Organisation membership," says Nguyen Thi Bich Lien, chief executive officer for VCBS. "Although state-owned banks currently control about 70% of the domestic capital market, we recognise that we need to leverage international best practice to meet our clients' increasing financing requirements, which we can do through our partnership with ING."

In addition to this deal, many analysts expect Vietcombank to launch an IPO early next year. Hanoi-based Vietcombank's assets stood at $8.3 billion at the end of 2005 -- and it is considered by locals as one of the better banks.

"We're very excited about the opportunities in Vietnam," says Grenville Thynne, head of corporate finance for ING Wholesale Banking in Asia. "Vietcombank and VCBSÆs understanding of the local market and relationships with Vietnamese corporates, and INGÆs global capabilities in corporate finance will help form the basis for a strong platform for collaboration."

ING originally started banking operations in Vietnam in 1992. With the mandate for Vietcombank in 2003, INGÆs activities focused on providing technical advice in areas including treasury and asset-liability management, risk management, internal audit, management information systems and IT functions, strategy and organisation.

VCBS was originally established in June 2002 and its primary activities include brokerage; investment portfolio management; underwriting and securities investment advisory. In 2003, its licence was expanded to include custodial services.