Tuesday February 26, 1:10 AM EST
HANOI, Feb 26 (Reuters) - The Bank of America (BAC) said on Tuesday it planned to shut down its operations in Vietnam at the end of next month.
An advertisement placed by the bank in national newspapers said this was a policy decision taken by headquarters in the United States.
The bank has a single branch in Vietnam, in Hanoi, which employs seven people. Staff there said they understood the closure was a cost-cutting measure. The bank shut its representative office in Ho Chi Minh City at the end of last year.
In January, France's BNP Paribas (BNPP) said it planned to cease domestic banking activity in Vietnam and would concentrate on offshore business from the country.
Banking industry sources attributed the move to the gloomy outlook in Vietnam for corporate banking.
According to official media, there are 27 foreign bank branches in Vietnam and a total of 42 foreign financial institutions have representative offices.
Bank of America established its representative office in Vietnam in 1993 and opened its branch in 1995.
Its decision to pull out of the country comes despite ratification late last year of a key bilateral trade agreement between the United States and Vietnam, which is expected to significantly boost trade and business between the countries.