The acquisition of Techcombank's finance company allows Lotte Card to enter the booming consumer finance market in Vietnam.
The Investor (South Korean) reveals that Lotte Card, a subsidiary company of Lotte Group, has reached an agreement to acquire the entire stake of TechcomFinance, a financial company of The Vietnam Technological and Commercial Joint Stock Bank (Techcombank).
TechcomFinance, with a chartered capital of VND600 billion (US$26.5 million), 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 focuses 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 profit before tax reached VND28 billion (US$1.23 million).
If the deal approved, Lotte Card will enter Vietnam's vibrant consumer finance market. The consumer lending market has grown by 30% in recent years and is now dominated by four companies including FE Credit (VPBank), Home Credit, HDSaison and Prudential Finance.
StoxPlus reports that Vietnam's consumer finance market is most attractive in the region with high growth potential and high profit margins.
Foreign investors are actively seeking to enter the consumer finance market through the acquisition of local companies. Meanwhile, MBBank has launched its consumer lending brand Mcredit, with the support of its Japanese counterpart, Shinsei Bank.
With its experience in the field of card payment, Lotte Card has the opportunity to exploit 121 million bank card market in Vietnam but the credit card rate is still very low.
Lotte Group has shown an active performance in Vietnam on many business lines including Lotte Mart, Lotteria fast food and Lotte Cinema.
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