Institutions from the Republic of Korea (RoK) have increased their investments in Vietnam’s financial market significantly, expecting to make big gains thanks to the economic growth outlook.

Woori Bank - Illustrative image

The investments are poured through the acquisition, capital contribution or comprehensive co-operation agreements with local financial companies and banks.

Besides the two fully foreign-owned Shinhan Bank and Woori Bank in Vietnam, many other major RoK banks have also set up branches and representative offices in the country, such as KEB Hana, Industrial Bank of Korea, Kookmin, Busan and Nonghyup.

Early this month, the Hana Financial Group was the latest case of the RoK’s financial institutions to expand business in Vietnam by acquiring a stake in the Bank for Investment and Development of Vietnam (BIDV), according to Business Korea.

The Korean business portal quoted a local financial official that KEB Hana Bank was going forward with the acquisition and was reportedly close to signing a deal.

The deal will proceed in a way that BIDV will raise new capital through capital increase to improve its financial structure, and Hana Bank will purchase the new shares. According to a source, the only remaining process is to receive the approval of the State Bank of Vietnam (SBV) while the work is being finalised.

Early this year, the SBV allowed RoK conglomerate Lotte Group’s credit card arm to take over TechcomFinance, a subsidiary of Techcombank.

With the deal, the Korean conglomerate seeks to expand its presence in consumer credit and card services in Vietnam.

In January, the RoK’s Shinhan Card Co Ltd, a subsidiary of the Shinhan Financial Group (Shinhan), announced the acquiring of 100 percent stake of Prudential Vietnam Finance Company at a cost of 151 million USD.

Last year, Shinhan Bank Vietnam, a wholly owned unit of Shinhan Bank, also acquired the retail division of ANZ in Vietnam.

Besides the acquisition and capital contribution to Vietnamese financial institutions, Korean investors have also increased their presence in Vietnam’s financial market through comprehensive cooperation with local financial firms.

Last July, a major RoK bank, Daegu, announced the signing of a comprehensive cooperation agreement with Vietnam’s Orient Commercial Joint Stock Bank (OCB).

Nguyen Dinh Tung, General Director of OCB, said Daegu would support OCB in various areas, such as international money transfer, product development, SME services, training exchange programmes on risk management, information technology and product development in the RoK.

In mid-April, the Korea Development Bank (KDB) marked its presence in Vietnam through a comprehensive cooperation agreement with BIDV.-VNA