3-8-2023 (HANOI) Kasikornbank (KBank), Thailand’s second-largest lender, is reportedly in discussions to acquire consumer finance provider Home Credit Vietnam in a deal valued at up to $1 billion. This move is part of KBank’s broader strategy to expand its presence in Vietnam, with the aim of becoming one of the country’s top 20 banks in terms of assets by 2027.
KBank currently has total assets worth $119.7 billion, making it the second-largest bank in Thailand, following Bangkok Bank, according to Refinitiv data. This potential acquisition comes at a challenging time for Vietnamese banks, as the country’s economy has been slowing down, and the real estate sector is facing prolonged turmoil, leading to an increase in bad loans and a series of interest rate cuts.
If the deal goes through, it would reflect a growing trend of consolidation in Asia’s finance sector. Moreover, KBank’s acquisition of Home Credit Vietnam would become the second-largest M&A transaction in Vietnam’s financial industry this year, following the sale of a $1.5 billion stake in Vietnam Prosperity Joint Stock Commercial Bank to Japan’s Sumitomo Mitsui in March, as per Refinitiv data.
While discussions are ongoing and no final decision has been reached, KBank has engaged with financial advisors to explore the potential acquisition. One source familiar with the matter highlighted that a deal with Home Credit would enable KBank to expand its credit services for small-scale retail stores, particularly benefiting small business clients.
KBank confirmed its interest in a deal with Home Credit in a stock exchange filing and stated that it continuously seeks various business opportunities in Vietnam. The bank also emphasized its commitment to promoting financial inclusion in the country, where a significant portion of the population lacks access to banking services.
In June, KBank received approval from the Vietnamese central bank to increase its core capital for its operations in Vietnam, aiming to become the second-largest foreign bank in the country. The bank has set ambitious targets, including reaching a net income of $400 million, outstanding loans of $5.13 billion, and a customer base of 8.4 million in Vietnam by 2027.
Home Credit Vietnam, part of the Netherlands-headquartered non-bank financial institution Home Credit Group, has been operating in Vietnam since 2008. The company employs 6,000 staff and serves 12 million customers through 9,000 outlets, offering various financial products, including cash loans and instalment loans for motorcycles and consumer durables.
Home Credit Group is controlled by the Czech Republic’s largest investment group, PPF, founded by the late billionaire Petr Kellner. The group reported a wider loss in the first half of 2022, mainly due to the impact of selling its Russian operations.
