Vietnam is always on the top of the list for Korean financial companies hoping to go abroad, writes Korea's JoongAng Ilbo Daily.

The country is a juggernaut when it comes to economic growth, and it was even able to shove aside the global meltdown.

Financial firms in Korea are also salivating over the country’s relatively young population, which consists of many locals who are eager to open bank accounts, trade stocks and access all kinds of financial services that are still sparse in the country.

Many of these institutions are gearing up to expand their presence in the promising Southeast Asian country after being forced to scale back overseas investments as the economy dived.

According to data from the Financial Supervisory Service, a total of 34 local financial companies - ranging from banks and stock brokerage to insurers - were operating in Vietnam as of late September 2009.

Shinhan Bank, Korea’s third-largest bank by assets, is helping pave the way for other Korean firms looking to enter the market.

The bank’s locally incorporated unit in Vietnam, named ShinhanVina Bank, has two branches with a combined net profit in 2008 that ranked as the 14th-largest among the 42 domestic and international banks operating within the country.

Its local presence dates all the way back to 1993, when ShinhanVina - headquartered in Ho Chi Minh City - was established under the name FirstVina Bank as a joint venture among Vietcom Bank, Korea First Bank and Seoul-based stock brokerage Daewoo Securities. Soon after another Korean player, Chohung Bank, filled the slot previously held by Korea First Bank and was eventually acquired by Shinhan Bank. As a result, the Vietnamese joint venture was renamed ShinhanVina Bank.

Shinhan Bank, however, decided to establish a wholly-owned Vietnamese unit alongside the joint venture, setting up another locally incorporated unit called Shinhan Vietnam Bank last November.

“We’re just the fifth locally incorporated banking unit by a foreign lender here as Vietnamese financial authorities are very reluctant to let foreign banks open such businesses here,” said Lee Tae-ryong, the head of Shinhan Vietnam Bank. “We will launch more aggressive businesses this year by opening two more branches.”

Shinhan has good reason to be so bullish. Only about 10 percent of the Vietnamese population has a banking account, offering banks a virtually untapped market.

“Shinhan Vietnam is a bank set up to specialize in private banking services for local Vietnamese,” said Cho Yong-byong, Shinhan Bank’s executive director in charge of international businesses. He stressed that ShinhanVina Bank, on the other hand, is designed to provide corporate banking services to the country’s small and midsize companies.

Vietnam’s rapid economic rise also offers opportunities beyond the banking market. Daehan Life Insurance, one of Korea’s top three life insurers, took bold steps to grab a foothold in Vietnam’s nascent life insurance industry, which is currently dominated by Prudential - a British insurance behemoth - and state-run Bao Viet Insurance.

“We are faring better than Taiwanese life insurers that entered the market earlier than we did,” said Hyun Jeong-seop, head of Daehan Life Insurance’s Vietnamese unit. “Complete localization is our biggest weapon. We will be able to produce a net profit beginning in 2011.”

Golden Bridge Investment & Securities, a Seoul-based brokerage, is nowhere near being a top player in Seoul’s financial scene. But the firm boasts that its Vietnamese operation is incomparable to those of other Korean brokerages there. Golden Bridge, which first started businesses in Vietnam in late 2005, acquired a Hanoi-based brokerage called Click & Phone Securities and eventually established a research firm specializing in investment and corporate credit analysis.

“Our target demographic is local Vietnamese, not Korean investors,” said Moon Goo-sang, the CEO of Golden Bridge Vietnam. Indeed, more than 95 percent of the firm’s stock-trading account holders are Vietnamese. Moon also said the firm plans to go public on the Vietnamese stock market in April, an ambitious goal that, once realized, will make Golden Bridge the first Korean financial company to do so.