Lotte Card Co., credit card unit of South Korean conglomerate Lotte Group, is set to buy a full stake in TechcomFinance, a subsidiary of Vietnam’s fifth-largest bank Techcom Bank, in a bid to tap into the Southeast Asian country’s fast-growing consumer finance market.
Lotte Card announced on Monday that it gained final approval from Vietnam’s central bank for the acquisition, becoming the first Korean credit card company to make inroads into the local consumer finance market by earning licenses to operate credit card and other related businesses. TechcomFinance currently holds credit card, installment finance, and consumer lending licenses in the country.
The approval comes after Lotte Card signed a corporate transfer contract to buy a full stake in TechcomFinance in September, last year, and has put out steady efforts to build trust in the country to gain approval from the local financial authority.
Lotte Card plans to expand its business in Vietnam by developing various finance business models based on network established by other units that have already entered into the local market. The company plans to develop customized financial products based on its knowhow and introduce installment finance products and engage in credit card and consumer lending businesses focusing on its retail subsidiaries such as department stores and large discount stores.
An unnamed official from Lotte Card said that it aims to stabilize its finance business in an early stage by working with other units promoting business in Vietnam.
Lotte Group which pulled its discount store chain out of China last year after struggling under state-sponsored retaliation for yielding its golf club site to host U.S. antimissile system has been making aggressive turn towards Southeast Asian region for business alternatives.
By Oh Chan-jong and Lee Eun-joo
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