Credit

TOKYO -- Sumitomo Mitsui Financial Group Inc will invest up to 150 billion yen ($1.38 billion) in Vietnam’s biggest non-bank lender FE Credit, a spokesman said on Wednesday, as part of a strategy to look beyond a slow-growing domestic market. SMFG, Japan’s second biggest lender by assets, said in a statement its consumer finance unit would acquire a 49% stake in FE Credit. The Vietnamese firm’s valuation was $2.8 billion, its parent company said in a separate statement. The deal, which was reported by the Nikkei newspaper earlier, comes as SMFG has sought to expand its business in Southeast Asia, given the ultra-low rate environment and shrinking population at home. Jun Ohta, chief executive of SMFG, previously told Reuters the bank was looking to expand its business in markets including Indonesia, Vietnam, the Philippines and India. FE Credit, a major consumer finance firm in Vietnam, has over 13,000 points of sales nationwide and provides financial solutions through consumer lending products and services, according to its website. The Vietnamese company posted net profit of about $125 million for the financial year ended in December. ($1 = 108.9300 yen) …

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SMFG acquires a 49 per cent stake in FE Credit Vietnam Prosperity Joint Stock Bank (VPBank) yesterday announced that it had reached an agreement with Sumitomo Mitsui Financial Group (SMFG, the corporate group will collectively be referred to as SMBC Group) to sell 49 per cent of charter capital of $2.8 billion VPBank Finance Co., Ltd. (FE Credit). SMBC Consumer Finance Company (SMBCCF), a subsidiary wholly owned by SMFG, is the legal entity to purchase this stake. Nikkei Asia reported the Japanese bank will invest more than $1.4 billion in FE Credit as early as October, making it an equity-method affiliate. FE Credit is currently the leading consumer finance company in Vietnam with approximately 50 per cent of the market share, 20,000 points of sales nationwide, and more than 13,000 employees. Throughout its development, FE Credit is committed to accomplishing its mission of “satisfying the need of people of all strata to access formal credit to improve their livelihood”. With its small-sized loans, FE Credit always pays special attention to serving low and medium-income customers – being the segment not prioritised by banks – in order to meet their financial needs and help reduce their dependence on “black credit”. So far, FE Credit has served about 11 million Vietnamese people with its unsecured lending and services. Meanwhile, SMBC Group is one of the three biggest banking and financial groups in Japan, with total assets of over $2.1 trillion as of December 31, 2020. The group operates in retail banking, corporate banking, and investment banking worldwide, with its presence in over 40 countries. SMBCCF is the leading consumer finance company in Japan with more than 900 branches. In Asia, SMBCCF has established subsidiaries in Taiwan, Hong Kong, Thailand, and China. With this transaction, FE Credit expects to receive support in terms of funding, corporate governance, and know-how in consumer finance in Asia from SMBC Group, especially from SMBCCF …

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Banks roll out green credits for eco-friendly approach The Vietnamese government’s increasing support and gradual policy reform in recent years have boosted green projects in different sectors across the country. According to Stephanie Betant, country head of Wholesale Banking at HSBC Vietnam, there is a momentum building up worldwide of environmental and climate risks being regarded and managed alongside any other financial risks – and as a result, the demand for green credit rises. The State Bank of Vietnam (SBV) said that the country currently has 31 financial institutions involved in green credit, with total credit of more than VND285 trillion ($12.4 billion), mainly on green agriculture and renewable energy. Eco-friendly credit and green bond issuance have received great attention as these debt instruments could promote a lower-carbon and a more resilient economy. According to SSI Research, the bond value mobilised for solar power projects climbed to VND29.9 trillion ($1.3 billion) in 2020, a 254 per cent jump on-year. In terms of credit sources, by the end of 2020, banks had poured VND84 trillion ($3.65 billion) into renewable energies, mostly lending to solar power projects. That is because solar power is deemed a renewable energy that is stimulated for investment and development, Betant explained. Credit channelling into solar projects just accounts for 1 per cent of banks’ total outstanding loan balance. Last November, HSBC Vietnam inked an agreement with Vietnam-based REE Corporation to provide a 7-year term loan worth nearly $28.7 million to develop a rooftop solar project. Previously, the bank signed a green credit agreement to finance Duy Tan Plastics Recycling Factory. “Green investment, like new technologies, usually require a long payback period, a large sum of capital, and strong expertise to ensure that those projects meet all green criteria from starting point to product commercialisation,” said Betant. “While some of these …

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