VietNamNet Bridge - Techcombank plans to sell Techcom Finance and MCredit has been renamed MB Shinnei, signs that the Vietnamese consumer finance market continues to attract investors.

The signing ceremony between Techcombank and Lottecard

Techcombank on September 29 announced the transfer of its Techcom Finance under a board of management decision.

South Korean press reported that the buyer in the deal is Lotte Card, a subsidiary of Lotte Group, which has invested in many business fields in Vietnam.

According to Maeil Broadcasting Network, the two sides have come to an agreement on a capital assignment deal worth 87.5 billion won, or VND1.734 trillion. 

Techcombank plans to sell Techcom Finance and MCredit has been renamed MB Shinnei, signs that the Vietnamese consumer finance market continues to attract investors.

The amount of money Lotte Card to take over the finance company is 2.89 times higher than the share face value. Techcom Finance, with charter capital of VND600 billion, was initially established as a finance company belonging to the chemical manufacturer Vinachem and later taken over by Techcombank in January 2015.

Also according to Maeil Broadcasting Network, in Lotte Card’s eyes, TechcomFinance is the company which has a license to issue credit cards. The credit card is exactly what the South Korean company targets.

Meanwhile, Prudential is going to sell Prudential Finance, the first 100 percent foreign owned finance company in Vietnam. A report shows that the company had a network of 300,000 clients by October 2016 and its charter capital had reached VND616.2 billion by the end of 2016.

Reuters quoted its sources as reporting that Prudential wants the price of $150 million, or VND3.4 trillion, 5.52 times higher than the charter capital based on the nominal price.

The common factors of both the deals is the high selling price, which, according to analysts, shows the attractiveness of the Vietnamese consumer finance market.

A lot of new moves have been taken at other finance companies. MCredit, a finance company belonging to MBBank, has changed its name to MB Shinsei because of changes in the shareholder structure.

Military Bank’s ownership ratio has decreased from 100 percent to 50 percent. Shinsei Bank from Japan now holds 49 percent, and Xuan Thanh Construction & Development 1 percent.

FE Credit belonging to VP Bank has successfully increased its charter capital from VND2.79 trillion to VND4.494 trillion. The finance company, which now holds 48 percent of the market share, has been continuously raising its capital since June 2014 when it bought the company from Vinacomin.

Maritime Bank, after taking over Vinatex’s finance company in 2015, has renamed the company FCCOM.

The consumer finance market has been growing rapidly with value up to VND744 trillion by June 30, 2017, accounting for 12.4 percent of the total outstanding loans of the national economy. The outstanding loans by finance companies have reached VND97 trillion, or 13 percent of consumer loans.

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