Vietnam’s dynamic financial landscape is proving to be a favoured destination for some Thai lenders.
With an ambitious target of 8.4 million users, Thailand’s second-largest bank, Kasikornbank (KBank), is priming to pour more than $1 billion into Vietnam between now and 2027, it announced a fortnight ago.
|Thailand lending duo on the march with fortifying presence |
KBank chairman Pipit Aneaknithi revealed that a lion’s share of this investment, $735 million, is earmarked for banking operations.
“The remaining funds are set to bolster two of KBank’s subsidiaries in Vietnam: the KVision investment fund, with an infusion of $336 million, and technology firm KBTG, receiving $7 million,” he said.
Currently, KBank operates a representative office in Hanoi and a Ho Chi Minh City branch that has been licensed since 2021, with initial capital of $80 million. In May, it escalated capital to $285 million, making it the second-highest capitalised foreign bank branch in Vietnam.
“For KBank, Vietnam is deemed a pivotal growth sector in Southeast Asia. Furthermore, the pro-business policies championed by the Vietnamese government hold much promise,” Aneaknithi said.
KBank’s heightened investment in Vietnam is tailored towards both the small- and medium-sized enterprise segment and individual customers. By the end of the year, the Ho Chi Minh City branch aims to disburse $40 million to smaller businesses, operating entirely online and targeting a seamless service experience.
For individual customers, its KPlus app, having been in the market for a year, now boasts 760,000 users. With goals to reach 1.3 million by the end of this year and 8.4 million by 2027, the application recently launched a savings initiative offering an interest rate of up to 8.5 per cent annually for a six-month term.
However, lingering economic effects continue to hamper banks in the country. With only one licensed branch in Vietnam, KBank leaders concede that their customer expansion must be digital-led, and acquisitions are also not off the table.
On August 23, Reuters reported that KBank is in talks to acquire Home Credit Vietnam, with the valuation of up to $1 billion. This initiative would support KBank’s goal of becoming one of the top 20 banks in Vietnam by 2027.
Beyond KBank and in addition to Bangkok Bank wishing to expand operations in Vietnam, another Thai bank is intensifying involvement in Vietnam’s financial arena. In May, Bank of Ayudhya, known as Krungsri, acquired Vietnam’s SHB Finance. It received transfer of the first half of charter capital and will complete the remaining half in the next three years.
SHB Finance chairman Dan Horoso said, “Vietnam stands as a key market in Krungsri’s overarching ‘Go ASEAN’ strategy.”
Apart from fortifying its presence in Vietnam’s banking sector, Krungsri is broadening its investment strategy in the nation through its venture capital arm, Krungsri Finnovate.
Just last week, Krungsri Finnovate was identified among the prominent investors in MFast, a burgeoning Vietnamese financial product distribution platform. This move was part of MFast’s recent Series A financing round, which successfully raised $6 million. Launched in 2021, Krungsri Finnovate’s fund underscores its strategic ambitions in the broader Southeast Asia region, setting its sights on Series A and subsequent investment rounds.
| ||Thai King approves new cabinet led by PM Srettha Thavisin |
Thailand's King Maha Vajiralongkorn has endorsed the cabinet of Prime Minister Srettha Thavisin, a royal gazette said on September 2.
| ||Thailand to liberalise oil imports |
The Thai Ministry of Energy will liberalise oil imports by allowing private companies to import finished oil products, to provide more options to consumers in the wake of high energy prices, Energy Minister Pirapan Salirathavibhaga was cited by local media as saying.