Credit card company Lotte Card made a foray into the Vietnamese market, in a first for a Korean credit card company, with the full acquisition of Hanoi-based Techcom Finance approved in March.
In March, the firm received approval from Vietnam’s central bank for the acquisition. It earned licenses to operate credit cards and related businesses, becoming the first Korean credit card company to enter the Southeast Asian country’s consumer finance market.
Telecom Finance is a subsidiary of Vietnam’s fifth-largest bank, Techcom Bank. It holds credit licenses including those for credit cards, installment loans, and consumer lending.
Approval from Vietnamese authorities came six months after Lotte Card signed a corporate transfer contract to buy a 100 percent stake in Techcom Finance in September last year.
|Lotte Card CEO Kim Chang-kwon (fourth from left) and VTV Cab Chairman Hoang Ngoc Huan (fourth from right) pose for a photo during the signing of a memorandum of understanding in Seoul on Nov. 9. (Lotte Card)|
According to Lotte Card, it will complete the establishment of infrastructure for its credit card business in Vietnam by year’s end. It plans to expand its business in Vietnam by developing finance business models targeting local customers. It will also introduce customized financial products for credit card and consumer lending businesses.
The company plans to launch credit card issuance, installment loans and consumer lending services within a year.
According to the media outlet Vietnam.net, there is fierce competition in the Vietnamese credit card market, with card issuers offering incentives and promotions, such as low membership fees and refunds at shopping centers.
Credit card companies are also simplifying the process of card issuance, offering online services and remote-issuance services.
Earlier this month, Lotte Card signed a memorandum of understanding with Vietnam Television Cable (VTV Cab), run by Vietnam’s largest state-run broadcaster Vietnam Television.
VTV Cab operates 70 analog cable channels, including 30 HD channels, with about 4.5 million paid-up members.
Lotte Card said that under the memorandum, it will facilitate the expansion of the credit card business including small-loan services for television licenses, the development of related-credit card products and sales advertisements.
Lotte Card CEO Kim Chang-kwon said in a statement that the two companies will join forces to create synergy for business expansion and future partnerships.
“Since it is the first major accomplishment that the company has achieved after permanently shifting its attention to new finance markets with high potential, we will continue to make all-out efforts to stabilize our finance business at an early stage,” he added.
By Kim Da-sol (firstname.lastname@example.org)