Very few foreign investors “go deep, stay long, stick” and participate in many sectors of Vietnam’s economy like Thai investors. Speaking of the “big games” of the “Thai people,” we cannot ignore the deals to acquire leading businesses in the manufacturing and retail sectors. Most notably is the “blockbuster” Sabeco that fell into the hands of Thaibev, owned by billionaire Charoen Sirivadhanabhakdi, in late 2017. Or the story of Central Group acquiring Big C Vietnam, as well as acquiring 49% of Nguyen Kim’s electronics and appliances system; …
Not stopping at traditional fields such as consumer goods and retail, “Thai people” are showing great ambitions in the finance and banking sector, a special field in the Vietnamese market.
Illustrative image
After Sabeco and BigC, “Thai people” are targeting the finance and banking sector
On February 28, 2024, Home Credit Group announced the transfer of 100% of its capital contribution in Home Credit Vietnam to The Siam Commercial Bank Public Company Limited (Siam Commercial Bank – SCB), a member of SCBX Public Company Limited (“SCBX”).
The transfer agreement is valued at around 800 million euros (equivalent to 875 million USD) and the transfer process is expected to be completed in the first half of 2025, after obtaining approval from the competent authorities of Vietnam and Thailand. This is the second largest M&A deal in the financial company in Vietnam, second only to the deal to acquire 49% of the capital in FE Credit by SMBC at a value of 1.37 billion USD in 2021.
According to professionals, the acquisition of Home Credit Vietnam will allow SCBX to promote financial services for individual and small business customers.
Before acquiring Home Credit, the fourth largest bank in Thailand has been present in Vietnam since 2015 when it established a branch in Ho Chi Minh City based on the acquisition, taking over the assets and debts of the Vietnam – Thai Joint Venture Bank (VSB). Currently, the branch of Siam Thai Bank in Ho Chi Minh City has a charter capital of nearly 3,000 billion VND, equivalent to some small banks in Vietnam.
Notably, SCB is not the only Thai bank seeking to expand its business operations in Vietnam through the acquisition of financial companies.
Previously, another big player from the “land of golden temples” is Krungsri Ayudhya Public Company Limited (Krungsri) that had agreed to acquire 100% of the capital of SHB Finance from SHB. Specifically, SHB transferred 50% of the charter capital of SHB Finance to Krungsri and will continue to transfer the remaining 50% of capital in the coming years. Speaking to Nikkei Asia, a representative of Krungsri said that the bank would spend nearly 156 million USD on the deal, equivalent to over 3,600 billion VND.
The second largest bank in Thailand, Kasikornbank (Kbank), has also been present in the Vietnamese market since 2014, and has recently been striving to increase its influence in Vietnam. Kasikornbank is currently the second largest foreign bank in Vietnam with a charter capital of 6,621 billion VND, equivalent to 285 million USD.
In a recent media sharing session, Mr. Pipit Aneaknithi, Chairman of KBank, unexpectedly revealed plans to pour more than 1 billion USD into Vietnam by 2027. The majority of the funds will be invested in banking operations, with 735 million USD. The remaining amount is for KBank’s two subsidiaries in Vietnam, the investment fund KVision (336 million USD) and the technology company KBTG (7 million USD).
In addition to the above-mentioned 3 major banks, Bangkok Bank, the largest bank in Thailand, has also opened 2 branches in Vietnam (Hanoi and Ho Chi Minh City) with a total registered capital of over 5,200 billion VND.
Therefore, 4 out of the top 5 largest banks in Thailand have directly or indirectly entered Vietnam with a total investment capital of tens of thousands of billion VND. Thus, Thailand has become one of the strongest capital pouring countries in the banking sector in Vietnam, alongside Japan and Korea.
Ambitions of “Thai people” in the Vietnamese banking sector
Along with the strong presence of consumer goods and retail manufacturing enterprises, banks from the “Golden Temple” country are also actively expanding their operations in Vietnam to serve the financial needs of Vietnamese businesses, along with the group of small and medium-sized enterprises (SMEs) that are partners of Thai businesses.
In addition, the 100 million population market with a young population structure and the still relatively new financial services sector of Vietnam is considered an attractive cake for foreign investors, especially investors in the region such as Thailand, which shares many cultural similarities.
In a recent media communication, Mr. Pipit Aneaknithi, Chairman of Kbank, commented that Vietnam is viewed as a key development in Southeast Asia by this bank.
According to Mr. Pipit Aneaknithi, this place has notable advantages with its young population, many engineering graduates who can help the country participate deeply in the global supply chain, along with government policies that drive the economy well.
He likened the development formula for Vietnam to preparing a dish with 3 main ingredients. The first ingredient is human resources, with over 20 million engineering graduates annually. The second ingredient is technology. The third ingredient is the financial sector, where the banking industry will play a vital role in supporting industrial production activities.
With increased investment capital in Vietnam, the “big” Thai banks are targeting small and medium enterprises (SMEs) and individuals. According to Mr. Pipit Aneaknithi, this bank sees an opportunity when over 97% of businesses in Vietnam are SMEs, but only account for 20% of the market share in the credit capital market structure.
KBank aims to reach 1.2 million customers in Vietnam in 2023 and enter the top 20 largest banks in Vietnam in 2027.
Sharing about the plan after acquiring it, Mr. Arthid Nanthawithaya, CEO of SCB X Public Company Limited, said: “The acquisition of Home Credit Vietnam marks an important milestone in the journey to becoming a leading financial technology conglomerate in the region for SCBX. This deal will consolidate our presence in the high-growth ASEAN market, while also adding value and maximizing profits for SCBX’s shareholders in the long term.”
According to Arthid, with a dynamic economy, average GDP growth of 7.5% over the past decade, and a tech-savvy population, Vietnam is an important strategic market for SCBX. This acquisition marks the start of SCBX’s expansion into the Vietnamese market, a country with a population of over 100 million people.
“With 15 million customers, 14,000 sales points, and an experienced management team, Home Credit Vietnam will play a key role in SCBX’s presence in Vietnam and immediately contribute positively to the conglomerate’s profits after completing the deal. This acquisition also diversifies the group’s income base to enhance competitiveness in the future while maintaining superior capital adequacy ratios in both SCBX and the bank after the transaction is completed,” SCBX’s CEO added.
With Krungsri, through the investment in SHB Finance, this Thai bank does not hide its ambition to lead the consumer finance sector in Vietnam.
“The Vietnamese economy is expected to continue to grow strongly thanks to the potential for annual growth of about 6-7%, along with booming business opportunities thanks to increased consumption. We believe that the cooperation between Krungsri and SHBFinance will strengthen the brand, operational efficiency, and promote the position of SHBFinance to become a leading company in the Vietnamese consumer finance market,” said Kenichi Yamato, Chairman and CEO of Krungsri.
In addition, through the investment in SHBFinance, this Thai bank will expand its presence in Vietnam, as well as strengthen its business operations in the region. This move also helps Krungsri strengthen its brand in the 5 ASEAN countries, thereby connecting the needs of customers throughout the region.
