Koreans flood Viet Nam finance firms

Institutions from the Republic of Korea (RoK) have increased their investment in Viet Nam’s financial market significantly, expecting to gain from the market, thanks to the economic growth outlook. - Photo noithatthinhhung.com

The investment is through the acquisition, capital contribution or comprehensive co-operation agreements with local financial companies and banks.

Besides the two fully foreign-owned Shinhan Bank and Woori Bank in Viet Nam, many other major RoK banks have also set up branches and representative offices in the country, such as KEB Hana, Industrial Bank of Korea, Kookmin, Busan and Nonghyup.

Early this month, the Hana Financial Group is the latest case of RoK’s financial institutions to expand business in Viet Nam by acquiring a stake in Bank for Investment and Development of Viet Nam (BIDV), according to Business Korea.

The Korean business portal quoted a local financial official that KEB Hana Bank was going forward with the acquisition and was reportedly close to signing a deal.

The deal will proceed in a way that BIDV will raise new capital through capital increase to improve its financial structure, and Hana Bank will purchase the new shares. According to a source, the only remaining process is to receive the approval of State Bank of Viet Nam (SBV) while the work is being finalised.

Early this year, SBV allowed RoK conglomerate Lotte Group’s credit card arm to take over TechcomFinance, a subsidiary of private lender Techcombank.

With the deal, the Korean conglomerate seeks to expand its presence in consumer credit and card services in Viet Nam.

In January, RoK’s Shinhan Card Co Ltd, a subsidiary of the Shinhan Financial Group (Shinhan), announced the acquiring of 100 per cent stake of Prudential Vietnam Finance Company at a cost of US$151 million.

Last year, Shinhan Bank Vietnam, a wholly owned unit of Shinhan Bank, also acquired the retail division of ANZ in Viet Nam.

Besides the acquisition and capital contribution to Vietnamese financial institutions, Korean investors have also increased their presence in Viet Nam’s financial market through comprehensive co-operation with local financial firms.

Last July, a major South Korean bank, Daegu, announced the signing of a comprehensive cooperation agreement with Viet Nam’s Orient Commercial Joint Stock Bank (OCB).

Nguyen Dinh Tung, general director of OCB, said Daegu would support OCB in various areas, such as international money transfer, product development, SME services, training exchange programmes on risk management, information technology and product development in South Korea.

In mid-April, Korea Development Bank (KDB) marked its presence in Viet Nam through a comprehensive cooperation agreement with BIDV.