Far East National Bank Sets Plan For Branch in Ho Chi Minh City

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Far East National Bank Sets Plan For Branch in Ho Chi Minh City

WALL STREET WEST

Far East National Bank is set to open a new branch in Vietnam this fall, becoming only the third U.S. bank with an outpost in the Communist country.

Los Angeles-based Far East, a unit of Taiwan-based SinoPac Holdings, is the first U.S.-based bank to receive a license for a full-service branch in Vietnam since trade between the two countries was normalized in late 2001.

Citigroup Inc. and JP Morgan Chase & Co. had Vietnamese operations before the landmark trade agreement was signed.

Establishment of a branch in Ho Chi Minh City will extend Far East’s network of locations in the Pacific Rim with a trading partner whose importance is growing in the United States.

Two-way trade between the U.S. and Vietnam has nearly doubled in each of the last two years. It totaled $5.88 billion in 2003, versus $2.98 billion in 2002 and $1.51 billion in 2002.

Another reason for the move is to attract customers from Southern California’s ethnic Vietnamese base, said Far East National’s president, Robert Oehler.

“There is a large population of Vietnamese people living in South California and there is also a great many companies in this area that do business with companies in Vietnam,” Oehler said. “I believe having the technology that links our branches here to another branch in Vietnam will be an advantage for them.”

When opened in October, the new branch will take deposits and make loans in U.S. dollars, as well as the Vietnam currency, the dong. Customers will be able to go online and move funds between accounts in either country in accordance with local regulations. Plans call for the 3,000-square-foot branch to closely resemble the company’s U.S. outlets and employ about 20 people.

Oehler said customers who now use any one of Far East’s 15 branches in California typically rely on wire transfers to shift money to Vietnam. “With a wire transfer you might not know where your money is all the time,” he said. “You can learn a week later that your money didn’t get there.”

While noting that the company plans to make its new branch the focus of a marketing and promotional effort, he added that he anticipates that it will gain popularity with ethnic Vietnamese through word of mouth.

Al Stewart

Annuity Rules

As part of recent investigations into companies that sell variable annuities, the Securities and Exchange Commission this month proposed new standards for sale practices, disclosure and training for deferred variable annuity products.

The SEC and National Association of Securities Dealers, the securities industry trade group, have received a large number of complaints from individual investors about variable annuities, a complex investment product that allows tax-deferred treatment of earnings, a death benefit and an annuity payout that can provide guaranteed income for life.

A variable annuity’s rate of return varies with the underlying stock, bond or money market investment. Generally, such products include sales fees, surrender fees and a host of other fees.

Because of their complexity, the SEC called variable annuities “unsuitable” for older people and cited instances when individuals had to mortgage their homes to purchase products pitched by brokers.

The insurance industry has embraced variable annuity products and investments by Americans in them have jumped 20 percent in the past year to $985 billion.

The NASD advised investors not to invest in variable annuities within individual retirement accounts, a common practice in the insurance industry, because the annuity provides no additional tax advantage.

Kate Berry

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