Shinhan Card spends $150 million on Prudential Finance acquisition

Prudential sells finance company to focus on insurance market

Shinhan’s announcement on the stock exchange noted that the company will acquire 100 per cent of Prudential Finance’s shares, that are valued at 161.4 billion won ($150.8 million). It aims to expand the Vietnamese consumer finance sector, which has been reporting double-digit growth in recent years and is expected to sharply develop in the next years.

Prudential Finance is a 100-per-cent foreign capital consumer finance company established in 2007. The company’s revenue hit around $72 million with a profit of $13 million in 2016.

Prudential started selling insurance policies in Vietnam in 1999, then opened up Eastspring Investments Fund Management Company in 2005 and Prudential Vietnam Finance Company Ltd. in 2007.

The scale of Prudential’s insurance business in Vietnam is much smaller than in Hong Kong, Singapore, China, and Indonesia. It is expected to be developed after selling off the company’s consumer finance arm.

This movement mirrors other global insurance companies’ selling off their non-core business sectors in Asia to focus on the insurance market.

Prudential Finance, FE Credit, HomeCredit, and HDSaigon are four companies covering the Vietnamese consumer finance market. According to StoxPlus, the total outstanding loans of consumer finance companies was over VND56 trillion ($2.47 billion) at the end of 2016.

In 2017, Military Bank (MB) announced selling 49 per cent of the shares at VND500-billion MB One Member Co., Ltd. for Shinsei Bank of Japan and gaining VND615 billion ($27.1 million). In September 2017, this company was officially renamed to MB Shinsei Finance Limited Liability Company (MS Finance). MB Group still owns 50 per cent of MS Finance’s shares, while the remaining 1 per cent is owned by Xuan Thanh Development and Construction Investment Limited Company.

Earlier, Techcombank announced that its Board of Management approved all documents related to transferring the entire capital of TechcomFinance to Lotte Card. This deal enabled Lotte Card to break into the vibrant Vietnamese consumer finance market.

Next week, on February 1, 2018, Vietnam Posts and Telecommunications Group (VNPT) will also auction off Post and Telecommunication Finance Company Limited at the initial price of VND500 billion ($22 million), which is also the charter capital of this company since 1998.

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