Home Credit Group has announced the signing of a framework agreement to transfer 100% of the capital contribution in Home Credit Vietnam Finance Company Limited to The Siam Commercial Bank Public Company Limited (SCB), a member of SCBX Public Company Limited (SCBX), Thailand. According to the announcement, the transaction is valued at approximately 800 million euros (equivalent to 22,000 billion VND). The transfer process is expected to be completed in the first half of 2025.
Home Credit Vietnam is currently one of the leading consumer finance companies in Vietnam, ranking second in market share and accounting for about 14% of the total market value. The company employs approximately 6,000 employees and serves over 15 million customers nationwide.
Meanwhile, SCB is the oldest bank in Thailand, ranking fourth in total assets in the country. SCBX – the parent company of SCB – is also one of the leading financial technology groups in Thailand.
Earlier, at the end of 2023, Southeast Asia Bank (SeABank) signed a contract to sell all capital contribution in Post and Telecommunication Finance Company Limited (PTF) to AEON Financial Service Co., Ltd. – a member of AEON Group – the largest retail conglomerate in Japan. The announced transaction is valued at 4,300 billion VND.
As observed by reporters from Nguoi Lao Dong Newspaper, in addition to the above two transactions, the consumer lending market has continuously witnessed ownership changes, with the new owners mostly coming from Thailand or Japan. In 2023, Saigon – Hanoi Bank (SHB) transferred 50% of the charter capital of Saigon – Hanoi Commercial Joint Stock Financial Company Limited (SHB Finance) to Krungsri Bank of Thailand.
Home Credit is currently the second largest consumer lending company in Vietnam. Photo: BINH AN
Two years ago, Vietnam Prosperity Bank (VPBank) also transferred 49% of the charter capital of FE Credit to a subsidiary of the SMBC Group (Japan). This transaction brought VPBank tens of thousands of billions of VND.
These mergers and acquisitions (M&A) deals are taking place in the context of the consumer lending market facing many difficulties. Speaking at the recent conference on promoting credit growth in the banking industry in 2024, Mr. Nguyen Duc Vinh, CEO of VPBank, said the revenue of the 16 financial companies operating in the market all sharply decreased in 2023. FE Credit is also among them as demand for loans decreased and borrowers’ repayment capacity is very low. “Financial companies do not dare to aggressively lend as market risks increase. Although parties have proactively resolved difficulties, there still needs to be a coordinated policy to resolve related debt recovery” – suggested Mr. Vinh.
Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Banks Association, said that the consumer lending activities are facing increasing bad debt pressures as some customers deliberately refuse to repay their debts, even forming “debt evasion” groups. This reality forces financial companies to tighten their appraisal process, making it increasingly difficult to grant loans. Therefore, a synchronized solution is urgently needed to remove obstacles in this field.
Deputy Governor Dao Minh Tu of the State Bank of Vietnam said that solutions will be implemented to alleviate difficulties and restore consumer lending.
Large Development Potential Remains
From another perspective, financial expert Huynh Trung Minh believes that the current difficulties in the consumer lending sector are only superficial and temporary, while the development potential in the future remains large. Partners from Japan and Thailand, when entering Vietnam, will bring experience, management practices, and operations to the market, opening up a more sustainable development phase. The microfinance market not only involves lending activities but also offers numerous other opportunities in a market with 100 million people.
