(Captured from Lotte Finance Vietnam website)
Lotte Card Co., South Korea’s No. 5 credit card issuer, provided $68 million to its Vietnamese unit to expand its business in the Southeast Asian country.
Lotte Card whose top shareholder is a major Asian buyout firm MBK Partners Ltd. said on Thursday it completed the capital increase for Lotte Finance Vietnam Co., the largest since the card issuer started the business in the country in 2018.
“The capital increase indicates that we will accelerate the business expansion in Vietnam as the business in the country has stabilized to a sustainable level,” Lotte Card said in a statement.
Lotte Card acquired Techcom Finance Co., a Vietnamese consumer finance service provider, in 2018 to make inroads into the market.
FINANCIAL COMPANY WITH STRONG FOOTHOLD IN VIETNAM
The South Korean company developed its own credit ratings model and established a risk-based pricing system to provide customers in Vietnam with tailored interest rates according to their credit ratings.
It also expanded a buy now, pay later (BNPL) service, a type of short-term financing that allows customers to make purchases and pay for them at a future date, often interest-free.
“We aim to become a financial company with a strong foothold in Vietnam based on a stable business structure,” a Lotte Card official in Seoul said.
MBK and South Korea’s Woori Bank acquired a 79.38% stake in Lotte Card for 1.4 trillion won ($1 billion) in 2019 from Lotte Corp., the holding company of South Korea’s No. 6 conglomerate Lotte Group. The private equity firm currently holds 59.38%, while the banking unit of Woori Financial Group has 20%.
MBK in 2022 failed to sell its entire stake in the credit card issuer for more than 3 trillion won.
By Mi-Hyun Jo
mwise@hankyung.com
Jongwoo Cheon edited this article.
