Want to be in the loop?
subscribe to
our notification
Business News
BANK, FINANCE FIRM MERGERS TO PICK UP SPEED
ACB had announced yesterday that it would submit for approval, a project to set up a finance company with a charter capital of VND500 billion (US$23.25 million), during its shareholders meeting on April 22.
Industry experts said that the wave of mergers of commercial banks and finance companies is expected to continously surge this year to meet legal regulations and boost consumer lending.
The experts said the move would become a major trend this year, explaining that according to a State Bank of Viet Nam (SBV)’s draft circular regulating the consumer credit activities of financial companies, which is expected to be approved soon, commercial banks would need to establish financial companies if they want to venture into consumer lending.
Besides, State-owned groups and firms would also become obliged to finalise capital divestment from non-core businesses, including financial companies, from this year.
Senior finance expert Can Van Luc told the Dau tu (Investment) newspaper that State-owned groups and firms were facing huge pressure to exit from financial companies and this was an opportune time for banks to fully merge with these companies and boost consumer lending.
Luc pointed out that consumer lending accounted for just 6 per cent of the total outstanding loans in Viet Nam. Meanwhile, this rate was 15 to 20 per cent in many other countries, and as high as 35 to 40 per cent in the US market.
Besides, the merger activities of banks and financial firms were forecast to be vibrant this year, as per a SBV circular, which said banks would only be allowed to possess a stake in a maximum of two credit institutions, and the ownership must not be greater than 5 per cent.
At present, many banks own several stakes in financial companies, and in many cases their stakes surpass the 5 per cent benchmark.
Techcombank, for example, already possesses a 10 per cent stake in Viet Nam Chemical Finance JSC (VCFC). The bank, therefore, had announced earlier this year that VCFC would transfer roughly 90 per cent of their stake to Techcombank in the first quarter this year, bumping up Techcombank’s total stake in VCFC to 99.87 per cent.
Other mergers between financial companies and banks are also expected to become a reality this year, including between the Sai Gon-Ha Noi Bank (SHB) and Vinaconex-Viettel Finance JSC (VVF), and between the Maritime Bank and Textile Finance JSC (TFC), both of which have received in-principle approval from SBV.
Earlier this month, the HCM City Housing Development Joint Stock Bank (HDBank) and the Japanese Credit Saison Company Ltd also formed the HD Saison Finance, in which the two will contribute to develop the retail finance industry in the country.
Banking expert Huynh Trung Minh said the growing number of finance companies would help reduce interest rates on consumer loans and improve the service quality of lending.
Source: Business Times
Related News
![Card image cap](/uploads/news/Investment6.jpg)
VIETNAM ONE OF FASTEST-GROWING E-COMMERCE MARKETS IN SOUTHEAST ASIA
The report released on July 16 highlighted that the total GMV of Southeast Asia’s eight leading e-commerce platforms rose to $114.6 billion in 2023, up 15 per cent from 2022. The key drivers for the region's e-commerce GMV expansion in 2023 are Vietnam and Thailand, growing 52.9 per cent and 34.1 per cent on-year, respectively.
![Card image cap](/uploads/news/Industrial%20Zone.jpg)
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).
![Card image cap](/uploads/news/Security.jpg)
2025 PIVOTAL FOR STOCK MARKET UPGRADE EFFORT
The Ministry of Finance (MoF) is expected to soon publish the entire content of the draft circular amending and supplementing four circulars on transactions, registration, depository, and clearing, as well as operations of securities companies and information disclosure. This move, along with feedback and explanations, aims to meet the criteria for upgrading Vietnam’s stock market.
![Card image cap](/uploads/news/bn-01.jpg)
VIETNAM INTENSIFIES E-COMMERCE TAX SCRUTINY
The department plans to offer guidance for and hold direct dialogues with e-commerce taxpayers to ensure compliance. Efforts will also include updating the e-commerce database, conducting risk analysis, and leveraging artificial intelligence (AI) to manage data and issue alerts.
![Card image cap](/uploads/news/eco2.jpg)
FOOTWEAR EXPORTS SEEN REACHING US$27 BILLION THIS YEAR
This optimistic forecast reflects the industry’s efforts to expand and diversify its markets. Lefaso indicated that Vietnam’s footwear sector will concentrate on traditional markets like the U.S. and the European Union, alongside markets with free trade agreements to maximize opportunities.
![Card image cap](/uploads/news/Eco3%20%281%29.jpg)
CAPITAL FLOWS STRONGLY INTO INDUSTRIAL REAL ESTATE
Industrial real estate has had easier access to bank credit since July, when the State Bank of Vietnam (SBV) reduced the credit risk coefficient for industrial real estate from 200 per cent to 160 per cent, encouraging commercial banks to lend to more projects in the segment.