Vietnam's central bank, The State Bank of Vietnam, has appointed an ING-led consortium to advise Vietcombank, Vietnam's oldest bank on a range of technical issues. With ING in the consortium are PricewaterhouseCoopers, the Belgian Bankers Academy and Banking Financial Consultancy, a local Vietnamese consulting firm.

The agreement is called a technical twinning agreement and comes as part of a World Bank sponsored poverty reduction support credit that was signed in 2000. Under the terms of the contract, the World Bank will release funds for various programmes aimed at reducing poverty, including state owned enterprise reforms, trade reforms and banking reforms.

This agreement sees the consortium providing Vietcombank with advice on such areas as treasury and asset/liability management, risk management, internal audit, NPL resolution, IT and strategy, among others.

The advisers won the contract away from other bidders who are understood to include, Credit Lyonnais, ABN AMRO, KPMG and Lloyds TSB. According to insiders at ING, the contract is worth "a few million US dollars" and is "lucrative".

The deal is in the spirit of Doi Moi, Vietnam's modernization programme that has recently been jump started after a few years of inactivity. Bank reform is a key part of this reform programme. "The twinning programme between IGA Consortium and Vietcombank will address comprehensively all the key areas of priority for strengthening and modernizing," said Tran Minh Tuan, deputy governor of the State Bank of Vietnam. "Through this agreement we are confident that Vietcombank will successfully be transformed into a modern bank, which has effective management systems and is able to provide a full range of high quality products and services so as to integrate into the regional and international banking industry."

For ING, the mandate is the latest in a series of technical advisory roles it has won. The bank's financial institutions' institutional and government advisory unit was recently selected for a similar mandate in Mongolia with the Trade Development Bank of Mongolia. It has also worked with Lippo Bank in Indonesia and Chang Hwa Commercial Bank in Taiwan.