Japan’s Sumitomo Mitsui Finance Group acquires 49% stake in FE Credit

Saturday, May 01, 2021 00:00

Kalidas Ghose, general director of FE Credit delivered a speech at the signing ceremony. — Photo courtesy of VPBank

VPBank on Wednesday signed an agreement to sell a 49 per cent stake in FE Credit to Japan’s Sumitomo Mitsui Finance Group (SMFG) in a transaction that values the non-bank lender at US$2.8 billion.

SMBC Consumer Finance Company (SMBCCF), a subsidiary of SMFG, bought the stake.

Through this transaction, FE Credit is expected to receive support in capital resources, management capacity and experience in the consumer finance sector in Asia from SMBC Group, especially SMBCCF - a leading consumer finance company in the Japanese market. At the same time, this transaction will add a large amount of capital to VPBank, contributing to enhancing the bank's financial potential to capture new investment opportunities in the market.

For SMBC Group, the investment in FE Credit is part of the group's mid-term strategy to expand its business base in Asia. SMBC Group expected that this investment would create synergy in both sharing and acquiring business know-how of its partners.

FE Credit is currently the leading consumer finance company in Viet Nam with approximately 50 per cent market share, 20,000 service referrals nationwide, and over 13,000 employees. During the development process, FE Credit has consistently carried out the mission of “meeting the need to access official credit capital of all classes of the population in order to improve the quality of life”. With small loans, FE Credit is especially focused on serving middle and low income earners - a segment which has not yet been served by banks - to help reverse their dependence on “black credit”. FE Credit has served nearly 11 million Vietnamese people through its unsecured loan products and services so far.

SMBC is one of the three largest financial and banking groups in Japan, with total assets of over $2.1 trillion as of December 31, 2020. The group operates globally in retail banking, corporate banking, and investment banking, with a presence in more than 40 countries. SMBCCF is the leading consumer finance company in the Japanese market with more than 900 branches nationwide. In the Asia region, SMBCCF has established subsidiaries in Taiwan, Hong Kong, Thailand, and China. — VNS

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