26.08.2021, 18:59

Thailand’s bank to acquire Vietnam’s consumer finance company

Thailand’s Bank of Ayudhya (BAY) said on Wednesday that it will acquire SHB Finance in Vietnam from Saigon-Hanoi Commercial Joint Stock Bank for 5.1 billion baht ($155.77 million).

The Saigon-Hanoi Commercial Bank (SHB) of Vietnam has reached a deal to transfer a 50% stake its financial consumer company to Thailand’s Bank of Ayudhya Public Company (Krungsri), another 50% set to follow in the next three years.

The move still awaits approval from the State Bank of Vietnam (SBV), regulators from Thailand and Japan, where the Mitsubishi UFJ Financial Group (MUFG), Krungsri’s parent company, is located.

While details of the deal were not disclosed, SHB revealed it would bring a significant amount of proceeds.

Related: Here’s a great opportunity for foreign investors to acquire Vietnamese consumer finance business

“Vietnam’s consumer finance market is of huge potential and has plenty of room for development. After a thorough selection process, we have found a suitable partner with a strategy to develop a modern retail banking model,” said Do Quang Hien, chairman of the board of directors at SHB.

Seiichiro Akita, CEO of Krungsri, noted the experience and large network of SHB in Vietnam along with the financial strength of Krungsri would enhance SHB Finance competitiveness.

The deal also demonstrated Krungsri’s commitment to expanding its presence in ASEAN during the business plan 2021-2023 period, he added.

“We are very pleased to announce that we have signed agreements with SHB to acquire a 100% stake in SHB Finance, SHB’s consumer finance subsidiary,” Bank of Ayudhya President Seiichiro Akita said in a statement.

Also read: World Economic Magazine names GBS the “Best M&A Advisor Vietnam 2021”; 

Krungsri is currently the fifth-largest financial corporation in Thailand in terms of total assets and outstanding loans, with MUFG holding a 76.88% stake. The Japanese financial conglomerate is also a strategic shareholder in Vietnam’s Vietinbank with a nearly 20% stake.

Before SHB, VPBank also sold 49% in its consumer finance firm FE Credit to Sumitomo Mitsui Banking Corporation in a deal worth $1.4 billion.

As of late 2020, credit loans were estimated at VND1,800 trillion ($79 billion, accounting for 20% of total outstanding loans and a 2.5-fold increase against 2012.

This year, experts suggested credit demand would continue to rise at a pace of 13-15% year-on-year, according to a report from Vietnam’s Best M&A Advisor.

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