The Agribank headquarters in Hanoi. Agribank expects to sell its finance arm ALC I for 22.45 million USD. (Photo courtesy of Agribank) Hanoi (VNS/VNA) - Thai financialfirm Srisawad Corporation is looking to acquire the Finance Leasing Company I(ALC I) of the Vietnam Bank for Agriculture and Rural Development (Agribank) atan estimated cost of 523 billion VND (22.45 million USD).
According to Srisawad, the company is waiting for approval from the State Bankof Vietnam (SBV) for the deal.
In response to the Thai firm’s acquisition proposal, recently sent to theVietnamese Government Office, SBV said it would be processed after the ALC Irestructuring plan is approved according to the country’s regulations.
In 2017, Agribank announced the sale of ALC I and invited investors to acquirethe company. As of the end of the year, ALC I recorded accumulated losses ofmore than 714 billion VND and liabilities of 394 billion VND, according toAgribank’s financial statements.
After negotiations, Srisawad Corporation and Agribank signed a memorandum ofunderstanding (MoU) on the deal in July 2017. The Thai company agreed topay a total of 523 billion VND to acquire the Agribank subsidiary, includingall of ALC I’s 200 billion VND charter capital and the 323 billion VND originaldebt that ALC I borrowed from Agribank.
According to experts, investors are interested in Vietnamese finance companiesthanks to the high growth potential of the local consumer finance market. Themarket is projected to reach 44 billion USD this year, largely driven by anincrease in consumer spending, a rise in urbanisation and the strict lendingrules of domestic banks, according to Viet Dragon Securities Corporation.
Economist Le Xuan Nghia said consumer finance was a global trend, citing Europeas an example where consumer credit accounted for some 71 percent of bankloans. The proportion of consumer lending in Vietnam’s economy was lower thanthat of other medium-income countries, where the ratio stands around 30 percent.
To lure foreign investment in the market – which will benefit not only localfirms but also customers and the entire Vietnamese economy – chief economist ofthe Bank for Investment and Development of Vietnam Can Van Luc suggestedimproving the legal framework for the management of financial companies andcreating favourable conditions for new companies to develop in order toincrease competition.
These moves would help reduce lending interest rates of consumer loans,increase the variety of products and services and bring more benefits toconsumers and the economy, Luc explained.
At the same time, Lực said, the Government should quickly complete andimplement the National Financial Inclusion Strategies (NFIS) to increase accessto financial services.-VNS/VNA
According to Srisawad, the company is waiting for approval from the State Bankof Vietnam (SBV) for the deal.
In response to the Thai firm’s acquisition proposal, recently sent to theVietnamese Government Office, SBV said it would be processed after the ALC Irestructuring plan is approved according to the country’s regulations.
In 2017, Agribank announced the sale of ALC I and invited investors to acquirethe company. As of the end of the year, ALC I recorded accumulated losses ofmore than 714 billion VND and liabilities of 394 billion VND, according toAgribank’s financial statements.
After negotiations, Srisawad Corporation and Agribank signed a memorandum ofunderstanding (MoU) on the deal in July 2017. The Thai company agreed topay a total of 523 billion VND to acquire the Agribank subsidiary, includingall of ALC I’s 200 billion VND charter capital and the 323 billion VND originaldebt that ALC I borrowed from Agribank.
According to experts, investors are interested in Vietnamese finance companiesthanks to the high growth potential of the local consumer finance market. Themarket is projected to reach 44 billion USD this year, largely driven by anincrease in consumer spending, a rise in urbanisation and the strict lendingrules of domestic banks, according to Viet Dragon Securities Corporation.
Economist Le Xuan Nghia said consumer finance was a global trend, citing Europeas an example where consumer credit accounted for some 71 percent of bankloans. The proportion of consumer lending in Vietnam’s economy was lower thanthat of other medium-income countries, where the ratio stands around 30 percent.
To lure foreign investment in the market – which will benefit not only localfirms but also customers and the entire Vietnamese economy – chief economist ofthe Bank for Investment and Development of Vietnam Can Van Luc suggestedimproving the legal framework for the management of financial companies andcreating favourable conditions for new companies to develop in order toincrease competition.
These moves would help reduce lending interest rates of consumer loans,increase the variety of products and services and bring more benefits toconsumers and the economy, Luc explained.
At the same time, Lực said, the Government should quickly complete andimplement the National Financial Inclusion Strategies (NFIS) to increase accessto financial services.-VNS/VNA
VNA
