Over the past several years, the Vietnamese consumer finance market showed undeniable charm to foreign investors with the forecasted market value of nearly $1 quadrillion by the end of 2018.
Foreign investors flocked to acquire shares of Vietnam-based firms in order to further enter the consumer finance sector
Recently, Korea’s Shinhan Financial Group (SHG) was reported to successfully finalise the $151-million merger and acquisition (M&A) deal with Prudential Finance Vietnam (PVFC). Specifically, Shinhan Card, a subsidiary of SHG, acquired PVFC as a part of its business expansion strategy in the field of consumer finance in Vietnam.
Huynh Trung Minh, a Vietnamese financial analyst, pointed out that, “The Vietnamese consumer finance market was evaluated as one of the most prospective finance markets in the region due to a sizeable population of 93 million citizens with a rising number of urbanites gaining larger incomes than in the last several years, luring hordes of foreign investors to inject capital into the sector."
Previously, in April 2017, Shinhan Vietnam, a subsidiary of SHG, also bought off the retail banking segment of ANZ, aiming at expanding its retail business in Vietnam.
Over the same period, Lotte Card, under the management of Korea’s Lotte Group, announced a share acquisition at Tai Techcom Finance at the cost of VND1.7 trillion ($74.29 million), providing the firm a beneficial instrument to further penetrate the domestic consumer finance market.
In February, Vietnam Posts and Telecommunications Group (VNPT) expected to earn a minimum of VND500 billion ($21.85 million) from the M&A transaction with Post Finance Company (PTF).
Lately, BIDV Financial Leasing Company (BLC) signed the agreement of business expansion, turning itself from a 100 per cent BIDV-owned firm into BIDV-SuMi TRUST Leasing Company (BSL) thanks to Sumitomo Mitsui Trust Bank (SMTB) previously acquiring 49 per cent of the charter capital of the newly-established leasing firm.
The Vietnamese consumer lending market was forecasted to vigorously grow for at least the next twelve months, from the current recorded outstanding debts of VND600 trillion ($26.45 billion) to around VND1 quadrillion at the beginning of 2019.
By Thuy Vinh