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Banking & Finance

Lotte eyes Vietnamese credit card firm

Released at: 14:08, 30/09/2017

Lotte eyes Vietnamese credit card firm

Illustrative image (Source: baomoi.com)

Lotte Card Co. thought to be close to signing deal to acquire TechcomFinance.

by Quang Huy

South Korean conglomerate the Lotte Group is seeking to expand its presence in Vietnam with the acquisition of a Vietnamese finance company, in the hope of offsetting its snowballing losses in China amid an ongoing diplomatic spat between China and South Korea over Seoul’s installation of a US anti-missile shield.

It was reported on September 27 that the Lotte Card Co., the credit card unit of the Lotte Group, is in the final stages of talks to buy out TechcomFinance, a subsidiary of Vietnam’s fifth-largest bank, Techcombank.

“Lotte Card is expected to buy 100 per cent of TechcomFinance from Techcombank,” a source close to the acquisition deal, who declined to be named because the talks are still ongoing, was quoted as telling Pulse News. 

Techcombank hadn’t responded to a request for comment at the time of publishing.

Once the deal is clinched, Lotte Card will be the first South Korean credit card company to hold a credit card license in Vietnam. Via TechcomFinance, it will be able to offer card issuing, installment finance, and consumer loans in the country. 

This is the first acquisition the Lotte Group has made this year. Its decision to venture into Vietnam’s credit card market comes after its retail unit, Lotte Mart, closed its outlets in China after receiving business suspension orders from Chinese authorities.

To offset the growing business risk in China, the Lotte Group is believed to have shifted its focus away from China to Vietnam, which has been on a solid growth path, with many South Korean companies eager to expand their presence. 

The credit card market in Vietnam is still in the early stages of development, with only 3.3 per cent of the population owning credit cards, but the South Korean giant seems to be optimistic about the growth potential, as the Vietnamese Government has been actively encouraging its people to use plastic. 

The Lotte Group, which first entered Vietnam with its fast-food chain Lotteria in 1998, is currently operating several businesses under its ten units, including department stores, large retail stores, hotels, cinemas and home shopping. In July, Chairman Mr. Shin Dong-bin made a visit to Vietnam to look at its businesses in the country.

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