Victory for MoS as HSBC delays ‘last branch’ axe

HSBC has become the first bank to agree to delay the closure of a last branch in town until alternative banking arrangements are in place.

The bank’s move represents a victory for The Mail on Sunday’s Keep Our Cash Campaign. It means a number of communities will now not spend months bankless while a new banking hub is opened – or a cash deposit service introduced. Last year, the banks agreed to fund the settingup of hubs (community banks) in towns where the last branch was closing – and an independent assessor (cash machine network Link) had decided one was needed to ensure continued access to cash.

Yet the hubs rollout has been protracted as Cash Access UK – responsible for installing them – has struggled to find suitable sites. The average time for a hub to come on stream is more than a year. So far, only four have opened while 43 more are promised.

As the MoS highlighted last month, HSBC was due to close its Oakham branch in June. This would have left the town and the wider county of Rutland without a bank. Although Link recommended a hub for Oakham, it is nowhere near getting off the ground. HSBC told the MoS it would now ‘pause’ the Oakham closure until a hub was in place. It also said it would suspend closures in Ripley, North Yorkshire, and Colwyn Bay, Conwy, until cash deposit services recommended by Link were established.

HSBC says: ‘We understand that closing a branch can be difficult for some customers and the wider community – especially when it is the last in the area and there is a gap between its closure and a new hub opening.

‘Wherever a hub is recommended and we have a closure, we will pause it for up to 12 months to enable Cash Access UK time to develop a hub.’

FEW people understand how the Vietnamese stock market works better than Dominic Scriven. For more than 30 years, the former fund manager with M&G has immersed himself in the country. He’s learnt the language (not easy); married a Vietnamese woman; and set up a successful investment business called Dragon Capital.

The company is thriving. It employs 150 people and has £4 billion of assets under management, all in Vietnam. Scriven is proud of the fact that Dragon Capital is the biggest private investor in the Vietnamese stock market.

Last week, I caught up with the 59-year-old – not in Ho Chi Minh City where he lives (shame that, although the last time I was in Vietnam, I had my watch expertly removed from my wrist by a gentleman on a motor cycle). Like a good son, he was back in the UK seeing his mum on Mother’s Day.

Dragon Capital manages one of three investment trusts listed on the London Stock Exchange that invest specifically in Vietnamese stocks.

It is called Vietnam Enterprise Investments (VEIL), has a market capitalisation of close to £1.2billion, and has been listed in the UK since 2016. The two rival funds are VinaCapital Vietnam Opportunity (VOF) and Vietnam Holding (VNH, managed by Dynam Capital).

‘As investors, we’ve made occasional forays into other embryonic stock markets in Asia such as Laos and Myanmar,’ says Scriven. ‘But we’ve always come back to Vietnam. It’s a market we understand intimately.’

Economically, the country is in good shape. Although the western world is consumed by the threat of a full-blown banking crisis and recession, Vietnam marches on. Its economy kept expanding during the pandemic years of 2020 and 2021 and forecasts indicate growth this year could come in at 6.5 per cent.

The economy’s prime growth engine is strong inward investment. In the eyes of many multinational companies, Vietnam is the ‘new China’ with a plentiful supply of cheap labour. For example, Nike and Samsung have expanded manufacturing bases in the country. As a result, more than half of Nike’s shoes and 60 per cent of Samsung’s phones are made in Vietnam.

With a vibrant tourist industry and a burgeoning middle class with money to spend, the economic signs are positive. From a stock market perspective, things are more cautious. Markets are not driven by economic growth alone – and equity prices have fallen in response to fears of global recession and higher interest rates.

They have also come under pressure from being perceived as risk assets as opposed to safe havens like gold. The result is that over the past year, shares in VEIL, VOF and VNH have retreated by 24, 10 and 20 per cent respectively. They could shrink further if the panic sweeping through the banking sector in the United States does not dissipate.

Scriven is not unduly concerned. Stock markets never go up in straight lines – and he is convinced

that Vietnam’s economy will remain in growth mode while the equity market will prove rewarding over the long term. One positive is that Vietnam could obtain official emerging market status, a badge that has eluded it. When this happens – next year is Scriven’s best guess – it will put the stock market on the radar of more investors, especially powerful international institutions.

The elephant in the room is Vietnam getting tangled up in the big geopolitical issue that is Taiwan. If China invades, will Vietnam have to choose sides – and if so, will it compromise an economic model built around foreign investment?

Vietnam is an investment market for the brave. Scriven’s business bravery (and nous) have made him rich. But retail investors should approach Vietnam with caution.

Yes, invest a little on a regular basis – not a lot in one go – and view it as a long-term investment. Or maybe, just view Vietnam purely as a dream holiday destination.