Sumitomo Mitsui expands leasing business with BIDV

A final agreement to expand a joint leasing business in Vietnam between the two parties has been reached by way of Sumitomo Mitsui Trust Bank, a subsidiary of Sumitomo Mitsui Trust Holdings, investing 49 per cent of the total equity of BIDV Financial Leasing Company (BLC), a subsidiary of BIDV Vietnam’s biggest lender in terms of assets.

BLC has received the State Bank of Vietnam (SBV)’s approval in principle, and according to Sumimoto Mitsui Trust Bank, they and BIDV are preparing for the joint venture. The commencement of the business is scheduled in as soon as March or April, subject to the SBV’s official approval and the completion of the 49 per cent investment in BLC.

Sumitomo Mitsui Trust Bank and BIDV have entered into a Memorandum of Understanding (MOU) in December 2013 for the purpose of enhancing co-operation in Vietnam, and have provided banking business and financial services to Japanese corporations in the country and have been considering new opportunities of collaboration, including the joint venture.

According to Sumitomo Mitsui Trust Holdings, the leasing market in Vietnam has a potential for medium- to long-term and sustainable growth.

BLC, which is a 100 per cent owned subsidiary of BIDV, was established in 1998 as one of the first leasing companies in Vietnam. BLC has satisfied the financing needs of various companies, utilising the high-quality brand and customer base of BIDV, which is one of the top four state-owned commercial banks in Vietnam.

Sumitomo Mitsui Trust Bank will provide BLC with expertise in the leasing business and credit risk management, which it cultivated in Japan with its subsidiary, Sumitomo Mitsui Trust Panasonic Finance Co., Ltd. (SMTPFC) and will contribute to BLC’s growth.

In addition, through the joint venture, Sumitomo Mitsui Trust Bank and SMTPFC will provide sales finance leasing services to enhance the sales of Japanese-affiliated companies in Vietnam, and Vietnamese dong-denominated equipment lease as well as contribute to the expansion of business Japanese-affiliated companies conduct in Vietnam, in addition to leasing services provided to Vietnamese companies by utilising BIDV’s customer base.