Lotte to Buy Vietnamese Credit Card Firm amid China-Korea Spat

Minh Anh

12:30 29/09/2017

BizLIVE - The acquisition deal is expected to be closed soon to offset the rising business risk in China.

Lotte to Buy Vietnamese Credit Card Firm amid China-Korea Spat

Techcombank is expected to sell its financial firm TechcomFinance to Lotte soon.

South Korean conglomerate Lotte Group is planning to buy out TechcomFinance, the financial arm of Hanoi-based lender Techcombank, as it is facing losses in China due to the ongoing diplomatic standoff between China and South Korea over Seoul’s U.S. antimissile shield installation.
Lotte Card Co., the credit card unit of Lotte Group, is in the final stages of talks to acquire TechcomFinance, which currently holds a credit card license in the Southeast Asian country, the Pulse news wire reported, citing sources from Lotte Group and the investment bank industry.
“The two parties [Lotte Card and Techcombank], who have agreed on most terms, are expected to sign a final contract on Friday,” said a source close to the acquisition deal.
If going through with the deal, Lotte Card will be the first Korean credit card company to hold a credit card license in Vietnam. Via TechcomFinance, the Korean card issuer will be able to offer card issuing, installment finance and consumer loan services in Vietnam.
Lotte’s decision to venture into the Vietnamese credit card market comes after its retail unit Lotte Mart has decided to withdraw from China by selling off its outlets in the country. Its Chinese outlets were forced to close due to business suspension orders by Chinese authorities following the installation of the U.S. antimissile shield in South Korea.
To offset the growing business risk in China, Lotte Group is believed to have shifted away its focus from China to Vietnam, where many Korean companies are eager to expand their presence.
The credit card market in Vietnam is still in the early stages of development with only 3.3% of the country’s population owning credit cards. In addition, the Vietnamese government’s plan to encourage cashless transactions will open up opportunities in this market.
Lotte Group entered Vietnam with its fast-food chain Lotteria in 1998 and is currently operating several businesses under its 10 units including department stores, large retail stores, hotels, cinemas and home shopping.

MINH ANH

Từ khóa: Lotte, Techcombank

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