The Korean credit issuer Hyundai Card has struck a deal that allows it to buy half of total shares at the consumer finance firm FCCOM, member company of the Maritime Joint StockCommercial Bank (MSB) for nearly $42 million.
The deal will help the foreign credit card issuer expand its business in Vietnam, where consumer lending is booming on high domestic consumption, Yonhap News Agency reported.
The deal is expected to complete in the first quarter of 2020and the post-merger company will start operating in the second half of 2020.
“The entry into the Vietnamese market has a significant meaning in that it will mark Hyundai Card’s first direct entry into a foreign market,” Hyundai Card told Vietnam Insider.
“Vietnam is one of the world’s fastest growing markets. Its market for individual loans is currently growing at an annual average of 60percent, with the number of credit card holders surged 27 percent on-year to7.4 million last year.” according to Hyundai Card.
The Korean firm also plans to explore other markets in Southeast Asia, the Deal Street Asia reported.
Hyundai Card’s officers will be responsible for the finance while MSB staff will take care of sales and operations in the post-merger business.
In addition to consumer lending, FCCOM will also cover other sectors such as credit card issuance, automobile financing and corporate financing, which is expected to support the operation of two automobile firms Hyundai andKia Motors in Vietnam.
Before Hyundai Card, some Korean finance firms had enteredVietnam. In 2017 Lotte Card bought out Techcom Finance and launched its unit Lotte Finance in late June 2019. In early 2018, Shinhan Card acquired Prudential Vietnam for 150million USD. The merged business started operating in May 2019.
Aside Korean investors, Japanese firms have appeared on theVietnamese consumer lending market such as Credit Saison and Shinsei Bank, which have formed joint ventures with HDBank and Military Bank.