The State Bank of Vietnam awarded Standard Chartered and HSBC licences for wholly owned businesses following the country’s pledge to open up the sector to overseas competition when it joined the World Trade Organisation last year.

HSBC aims to open more than 10 branches in the next two years, and Standard Chartered is planning 30 branches over the next four years.

The move will give both HSBC and Standard Chartered a head start on rival banks looking to expand into Asia’s fastest growing economy and one of the least penetrated markets in Asia: only one in 10 people out of a population of 87 million hold a bank account.

But despite the market opportunities presented by the liberalisation of the banking sector in Vietnam, the country’s economic background is worsening as annual growth slows to 7% and inflation hits double digits.