Shinhan Bank, Woori Bank, KEB Hanam, and Lotte Card are among the Korean investors currently present in the Vietnamese credit market, aiming to grasp the top spots in the credit card segment which previously was rated as "highly potential."
Lotte Card wholly acquired Techcombank's financial arm, Techcom Finance
Eyeing the promising credit card and retail banking markets, a notable number of Korean commercial banks and financial firms were reported to penetrate the credit market through mergers and acquisitions (M&A).
Specifically, Shinhan Card spent VND3.42 trillion ($150.13 million) on the merger with Prudential Finance, while Lotte Card disbursed VND1.734 trillion ($43.9 million) to acquire Techcombank's financial arm, Techcom Finance.
Additionally, with the intent to top the Vietnamese credit card sector, Shinhan Bank recently acquired the retail banking segment of ANZ Vietnam. Shin Dong Min, CEO of Shinhan Bank in Vietnam, asserted that, “We (Shinhan Bank in Vietnam) plan to further enhance activities in the retail banking segment soon, especially investment in the digital banking system and promotion programmes for credit card owners."
Shin also added that Shinhan Bank's ultimate goal was to create balance between wholesale and retail banking. One of the reasons behind the similar business targets among Korean commercial banks and financial institutions was the healthy growth rate of 40-60 per cent of the Vietnamese credit consumer sector.
To date, credit cards only made up for a meagre 4-5 per cent of the total 127 million bank cards currently in use in the finance and banking system, which was previously highly praised by Korean commercial banks and financial firms due to the surging demand for card-based payments and the emerging presence of technological payment applications.
To compete with Korean investors, Home Credit, an Amsterdam-headquartered non-bank financial institution which previously solely concentrated on credit and cash lending, was recently reported to initiate new business strategies of investing in credit payments in Vietnam.