Thailand’s fifth-largest lender by assets, Bank of Ayudhya Plc expands its regional footprint by acquiring Vietnamese firm SHBank Finance (SHB Finance) from Saigon-Hanoi Commercial Joint Stock Bank.
The acquisition deal which will be implemented in two branches is subject to regulatory approvals. As per the deal, the Bank of Ayudhya will buy a 50 percent stake in the Vietnamese consumer finance company now and the remainder will conclude after three years.
With this announcement, the share price of the bank rose to 4.2% on Bangkok bourse.
As per the company sources, the acquisition deal has been finalized for US$155.77 million (5.1 billion baht). This will give the Bank of Ayudhya a 100% stake in SHB Finance and its consumer finance subsidiary. It will also give the Thai bank access to 200,000 borrowers of SHB Finance.
According to the Bank of Ayudhya, SHB Finance had achieved a compounded annual growth of 93 percent for loans by the second quarter of this year since 2018. Mr Seiichiro Akita, President and CEO of the Bank of Ayudhya said in his statement that SHB Finance’s extensive network and local expertise in Vietnam combined with the Thai bank’s strength in consumer finance will enhance the business competitiveness of SHB Finance.
With this deal, the Thai bank aims to develop and deliver quality consumer finance products to Vietnamese consumers. Bank of Ayudhya along with SHB Finance will now focus on bringing greater value to customers, partners, and shareholders while promoting the growth of consumer finance market in Vietnam.
The bank has already made its mark in the consumer finance and banking sectors in Cambodia, the Philippines, and Laos. This acquisition deal will help the Thailand-based bank to reaffirm its commitment to expand in the ASEAN market.
Mitsubishi UFJ Financial Group holds a 76.9 % stake in the Bank of Ayudhya. Besides that, media baron Krit Ratanarak is also a big stakeholder in the bank. Bank of Ayudhya is locally known as Krungsri.
Many banks in Thailand have been seeking overseas expansion in the last few years as there is weakened profitability at home. The strong growth of the ASEAN market and increasing demand of international loans has encouraged the lenders to expand outside the country. Thailand’s largest bank, Bangkok Bank acquired Indonesian bank Permata in 2019, while the second largest bank in the country Kasikornbank is about to open its first branch in Vietnam.