The deal will help the foreign credit card issuer expand its business in Vietnam, where consumer lending is booming on high domestic consumption, the company said.
The deal is expected to complete in the first quarter of 2020 and 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 said in a statement.
"Vietnam is one of the world’s fastest growing markets. Its market for individual loans is currently growing at an annual average of 60 percent, with the number of credit card holders surged 27 percent on-year to 7.4 million last year."
The Korean firm also plans to explore other markets in Southeast Asia.
FCCOM is a member company of the Maritime Joint Stock Commercial Bank (MSB).
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 and Kia Motors in Vietnam.
The deal was reported by Yonhap News Agency on October 29.
Before Hyundai Card, some Korean finance firms had entered Vietnam. 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 150 million USD. The merged business started operating in May 2019.
Aside Korean investors, Japanese firms have appeared on the Vietnamese consumer lending market such as Credit Saison and Shinsei Bank, which have formed joint ventures with HDBank and Military Bank.
According to data provider FiinGroup, consumer lending rose by average 66.3 percent per year in the 2015-2017 period, more than three times the rate recorded in 2013-2014. In 2018, the rate was 30.4 percent.
In 2018, FE Credit had the biggest part of the market with a market share of 47.3 percent, down from 2017's figure of 48.9 percent.
The proportion of consumer lending in the economy's total lending increased to 17 percent in 2017 and 19.7 percent in 2018 from 12.3 percent in 2016. But the rate is still low compared to other developed economies where the rate is estimated at 40-50 percent./.
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