VPBank (VPBank) owned by billionaire Ngo Chi Dung has announced investment in OPES, a non-life insurance company through shares from existing shareholders.

Once the transaction is completed, VPBank’s ownership ratio in OPES will rise to 98 percent and it will become the parent company of the insurer.

VPBank plans to spend VND585 billion to acquire 47.85 million OPES shares, or 87 percent of charter capital, at the average price of VND12,200 per share.

VPB shares have been decreasing recently amid the downward trend of the stock market, from VND40,000 per share in early April to VND28,000. VPBank’s capitalization value, therefore, has lost VND53 trillion, or $2.2 billion.

Jumping into the insurance market is a strategy that VPBank planned long ago. And the opportunity has become ripe as the bank now has a lot of money after selling 49 percent of FE Credit capital to SMBC of Japan last year.

Established in 2018 (VPBank is the founding shareholder with the ownership ratio of 11 percent), OPES has many clients thanks to strategic cooperation agreements signed with partners belonging to VPBank’s ecosystem such as YOLO, FECredit and CommCredit.

The bank saw strong growth in profits recently. However, the assets of the bank remain modest and the ability to make profit has become slack as FeCredit has many rivals and credit growth rate is controlled.

Under its development strategy, VPBank plans to expand into other business fields, including securities services and insurance.

VPBank has approved a plan on additionally contributing capital to ASC, a securities company, VND15 trillion at maximum. Earlier this year, it announced the purchase of more than 97 percent of ASC shares and changed its name into VPBank Securities.

Prior to that, VPBank succeeded with the purchase of the finance company belonging to Vinacoal in 2014.

Many other banks have also invested in securities and insurance in their plans to expand business.

TPBank has invested in ORS, VIB has taken over Globalmind Capital, and Kien Long Bank has expanded its ecosystem with Vietnam Gate Way (changed its name into KS Securities).

Many banks have securities companies, including VietinBank, Vietcombank, MB Bank, ACB and Techcombank Securities.

They have also cooperated with insurers to develop a new money-making channel. VietinBank is cooperating with Manulife Vietnam in an agreement on selling insurance for Manulife for 16 years, while ACB has been selling Sun Life insurance for 15 years since early 2021.

Manh Ha