11:46 | 13/11/2015 Finance - Banking
Commercial banks expect to attract foreign investment in their newly-established financial companies thanks to the profitable domestic consumer financial market, according to Dau tu (Investment) newspaper.
Many other banks such as Vietinbank, BIDV, and Vietcombank, along with Sacombank and ACB have also planned to set up financial companies or own financial companies through M&As
In 2015, Techcombank, Maritime Bank and VP Bank bought Viet Nam Chemical Finance JSC (VCFC), Textile Finance JSC (TFC) and Viet Nam Coal and Mineral Industries Financial Company, respectively, while the HCM City Housing Development Joint Stock Bank (HDBank) and the Japanese Credit Saison Company Ltd also formed the HD Saison Finance.
Many other banks such as Vietinbank, BIDV, and Vietcombank, along with Sacombank and ACB have also planned to set up financial companies or own financial companies through M&As.
Industry insiders said that M&As with financial companies was the shortest measure to help banks meet the central bank's regulations to qualify to be a part of the profitable consumer lending market in the future.
According to a draft circular from the central bank, which is expected to be issued soon, commercial banks are required to establish financial companies if they want to venture into consumer lending.
Currently, commercial banks can provide consumer credit, which is considered to be a high-risk venture.
Previously, other commercial banks such as VP Bank and HD Bank, which also resorted to M&As with financial companies, have also found foreign strategic partners to run the new financial companies.
After the acquisition of the Viet Nam National Coal – Mineral Finance Company last year, and the change in its name to the VP Bank Financial Company, the company also announced the sale of 49 per cent of the new company's stakes.
HD Bank also successfully sold 49 per cent of its HD Finance for Japan's Credit Saison.
Experts said that foreign investors were very interested in Viet Nam's consumer financial market.
Director and general manager of overseas business at Credit Saison Katsumi Mizuno said that Viet Nam was a high potential target for consumer credit thanks to its youth population and a low proportion of the country's population using banking and financial services.
Besides, experts said, it would be easy for foreign investors to earn profits from consumer lending in Viet Nam thanks to their cheap and abundance capital sources.
Meanwhile, local commercial banks prefer to join hands with foreign partners to run their financial companies as their governance, technologies and services in the consumer credit remain weak./.