Card firms expand presence in Southeast Asia

By Kim Bo-eun

Card firms are rushing to Southeast Asia to expand their presence there, amid tough market circumstances here. This is being done in the form of acquiring local financial firms in the region, as a localization strategy and also a means to manage risk.

KB Kookmin Card signed a share purchase agreement with Indonesia's PT Finansia Multi Finance (FMF) on Nov. 28 to buy an 80 percent stake in the Indonesian finance firm. FMF is one of the Southeast Asian country's top five credit finance institutions.

Based on the acquisition, KB Kookmin Card plans to launch its second overseas affiliate by the first half of next year, after receiving an approval from authorities and completing the merger process.

It plans to focus on installment loans, as well as strengthening digital-based financial services by partnering with local mobile platform businesses.

KB also acquired Cambodia's Tomato Specialized Bank in April 2018, and launched KB Daehan Specialized Bank in September the same year.

Shinhan Card launched Shinhan Vietnam Finance Company (SVFC) in July, as Shinhan Financial Group's first successful overseas M&A.

SVFC was launched after Shinhan acquired Prudential Vietnam Finance Company, which was the U.K.-based Prudential financial services group's Vietnam unit and the first foreign consumer finance firm to be established in the Southeast Asian country in 2006.

Shinhan Card plans to expand SVFC's business to retail finance, as well as consumer goods and car financing. It is also seeking to apply its mobile platform, digital and big data-based marketing to SVFC in partnership with local digital firms.

Shinhan Card also has subsidiaries in Indonesia and Myanmar.

Lotte Card launched its Vietnam subsidiary Lotte Finance Vietnam in December. Lotte became the first Korean card firm to launch a credit card business in a Southeast Asian country.

Lotte Finance Vietnam was launched after Lotte Card acquired the country's Techcom Finance last year. It plans to focus on retail finance.

Hyundai Card is set to purchase a 50 percent stake in the Vietnam-based Finance Company Limited for Community (FCCOM), which mainly deals with personal loans.

Starting in the second half of 2020, Hyundai Card will operate FCCOM in a joint venture with Vietnam Maritime Commercial Joint Stock Bank of which FCCOM is a subsidiary.

Hyundai Card said it will focus on sharing its know-how of financial products, marketing, risk management and digital finance.

This is Hyundai Card's first move to expand overseas.

“We are seeking to find new growth engines overseas as the local market has reached saturation,” a Hyundai Card official said.

“We chose Vietnam as the first country for expansion based on the country's high economic growth rate, its growing market for personal loans as well as the number of credit card customers.”