Prudential Plc on Tuesday announced that it had reached an agreement to sell 100 per cent of its Prudential Vietnam Finance Company (PVFC) to Shinhan Card Co Ltd, a subsidiary of the Shinhan Financial Group (Shinhan), at a cost of US$151 million.
The United Kingdom-based financial services group’s PVFC was launched in 2006 as the first foreign non-bank financial institution licensed for consumer finance lending in Viet Nam. Today, it is the fourth-largest consumer finance company by outstanding loan balance.
“Prudential and Shinhan will work closely to ensure a smooth transition of the business. PVFC remains committed to all of its customer obligations and operations will continue as normal until the transaction has been completed,” Prudential said in a statement.
It remains fully committed to the Vietnamese market through its life insurance business, Prudential Vietnam Assurance Private Limited, and asset management business, Eastspring Investments Fund Management Company (Viet Nam).
“PVFC is a high-quality business, but it is not core to our strategy in Viet Nam. We are delighted that Shinhan will be able to lead this consumer finance business through to the next stage of its development. Viet Nam remains an attractive and important market to Prudential where we have high-quality and fast-growing life insurance and asset management operations,” Nic Nicandrou, Chief Executive of Prudential Corporation Asia, said.
“As part of this transaction, we are further expanding our regional platform through the new long-term bancassurance partnership with Shinhan in both Viet Nam and Indonesia to continue serving the growing savings and protection needs of the Asian population,” he said.
Shinhan is a financial institution in South Korea with a diversified business portfolio across banking, credit cards, securities brokerage, life insurance, asset management and leasing. It is one of the largest financial institutions by market capitalisation in Korea, and Shinhan Card is the largest credit card company in the country. Shinhan has had a presence in Viet Nam since 1993.
Last year, Shinhan Bank Vietnam, a wholly owned unit of Shinhan Bank, also acquired the retail division of ANZ, a major Australian bank, in Viet Nam.
Currently, Prudential Finance Vietnam, FE Credit, HomeCredit and HDSaigon are four companies ruling the Vietnamese consumer finance market. According to StoxPlus, the total outstanding loan of consumer finance companies was more than VND56 trillion ($2.47 billion) at the end of 2016.