Thailand's second-largest bank, KBank, is in negotiations with Home Credit Vietnam, a Vietnamese consumer finance provider, aiming to acquire it for up to $1 billion. This move is aimed at broadening the Vietnamese market presence and enhancing its position in the market.
KBank hopes to rank among the top 20 banks in Vietnam by 2027 in terms of asset size. According to data from Refinitiv, the bank's total assets amount to $119.7 billion, making it the second-largest bank in Thailand, only behind Bangkok Bank.
This news comes at a time when Vietnamese banks are facing multiple pressures, with slowing economic conditions and turmoil in the real estate industry leading to an increase in non-performing loan rates, prompting banks to implement large-scale interest rate cuts.
This potential acquisition deal highlights the trend of consolidation in the Asian financial sector. According to data from Refinitiv, should the deal be finalized, KBank's acquisition would become the second-largest transaction in Vietnam's financial industry.
According to two informed sources, KBank is discussing this potential acquisition with financial advisers. Discussions are still ongoing, and no final decision has been made yet.
One informed source mentioned that KBank is currently launching the KBank Biz Loan solution, a credit service for small-scale retailers. The potential deal with Home Credit would help the bank offer more convenient financial services to its small business customers.
KBank confirmed on Wednesday that it is in discussions with Home Credit about a potential transaction. The bank stated that it would continue to seek various business opportunities in the Vietnamese market, although it is uncertain if a transaction will materialize. If a transaction were to occur, KBank would disclose relevant information.
On Wednesday morning, Bangkok Bank's stock rose by as much as 2.3% before falling back, with an increase of 0.8% by noon. Meanwhile, the Thai stock market index rose by 0.27%.
Vietnam has a population of over 100 million, with a rapidly growing working-age population. KBank estimates that over 69% of the population does not have bank accounts, a proportion that remains high across Asia.
In June this year, KBank received approval from the Central Bank of Vietnam to increase its core capital in the country from $80 million to $285 million, thus becoming the second-largest foreign bank.
KBank has set a target of achieving a net income of $400 million, a loan balance of 180 billion Thai Baht (approximately $51.3 billion), and a customer base of 8.4 million in Vietnam by 2027.
According to its official website, Home Credit Vietnam started its operations in the Southeast Asian country in 2008 and has grown into an entity serving 12 million customers with 6,000 employees. The company has 9,000 stores in Vietnam.
Besides cash loans, Home Credit Vietnam also offers installment loans for the purchase of motorcycles and durable consumer goods.
Home Credit Group is managed by PPF, the largest investment group in the Czech Republic, founded by the late billionaire Petr Kellner. Influenced by the sale of its Russian business, the group suffered significant losses in the first half of 2022.
