The divestment in TechcomFinance is expected to help the Vietnam Technological and Commercial Joint Stock Bank (Techcombank) record an extraordinary profit of more than VND1.1 trillion (US$48.4 million) in the first and second quarter of this year.
The State Bank of Vietnam (SBV) has inked the decision on approving the transfer of the entire stake in TechcomFinance held by Techcombank to Korea-based Lotte Card, a subsidiary company of Lotte Group.
Accordingly, the deal will have to be completed within three months from February 12 to May 12 since the effective date of the decision. If deal misses the deadline, the decision will automatically become void.
Previously, on January 19, SBV approved in principle the transfer of all Techcombank’s stake in TechcomFinance in accordance with the policy approved on May 22, 2017, by Techcombank’s Board of Directors.
The Investor (Korean) revealed, at that time, the deal price was estimated at 87.5 billion won, equivalent to VND1.73 trillion (US$76.3 million), 2.89 times higher than TechcomFinance's charter capital of VND600 billion (US$26.4 million).
If the deal succeeds, Lotte Card will enter Vietnam's vibrant consumer finance market. The consumer lending market has grown by 30 per cent in recent years and is now dominated by four companies including FE Credit (VPBank), Home Credit, HDSaison and Prudential Finance.
TechcomFinance was acquired by Techcombank in 2015. It used to be known as Viet Nam Chemical Finance Joint Stock Company.
According to the bank's report, in 2016, TechcomFinance focused on strengthening the operation, consolidating the system of policy documents, reporting system and maintaining existing business activities.
The total revenue of TechcomFinance reached VND33 billion (US$1.5 million); the total operating cost at VND6 billion (US$264,000) while its total pre-tax profit reached VND28 billion (US$1.23 million).
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