On December 21, Hyundai Marine & Fire Insurance Company (HMFI), South Korea’s second-largest non-life insurer in terms of market share, agreed to acquire a 25% stake or 16.7 million shares of VietinBank Insurance (VBI). The deal is expected to raise the charter capital of the Vietnamese insurer to VND667 billion (US$28.5 million). 

At the signing ceremony, state-run Joint Stock Commercial Bank for Foreign Trade of Vietnam (VietinBank), a major shareholder of VBI, signed a strategic cooperation agreement with HMFI. 

VBI’s representative said the deal would allow the Vietnamese company to take advantage of HMFI’s network for market expansion. 

In November, Bank for Investment and Development of Vietnam (BIDV), the country’s second-largest lender by assets, announced its intention to issue 603 million shares or a 15% stake through private placement to KEB Hana Bank, a subsidiary of South Korea’s Hana Financial Group. 

The share issuance is expected to take place in 2019. At the current market price of VND30,350 (US$1.3) per share, the planned BIDV shares issued to KEB Hana Bank are worth VND18.3 trillion (US$735 million).

Meanwhile, Lotte Finance Vietnam – backed by Lotte Card, a credit card unit of South Korean conglomerate Lotte Group, started operation on December 18. In early 2018, Lotte Card bought out TechcomFinance, a subsidiary of Vietnam Technological and Commercial Joint Stock Bank (Techcombank), in a bid to join Vietnam’s fast growing consumer finance market. 

The deal was reportedly worth VND1.73 trillion (US$74.25 million), 2.89 times higher than the charter capital of TechcomFinance at VND600 billion (US$25.75 million). Following this move, Lotte Card has become the first Korean credit card company to make inroads into Vietnam’s consumer finance market by earning licenses to operate credit card and other related businesses. 

As of present, Shinhan Bank and Woori Bank are two wholly owned foreign banks from South Korea operating in Vietnam. In September, Woori Bank announced an increase in charter capital from VND3 trillion (US$12.66 million) to VND4.6 trillion (US$195.4 million), becoming the second largest wholly foreign-owned bank in Vietnam just behind HSBC by capital. The State Bank of Vietnam (SBV) also approved Woori Bank to open an additional of six branches in the country. 

Last July, ANZ Vietnam sold its retail banking business to Shinhan Bank. Shin Dong Min, CEO of Shinhan Bank Vietnam, said the bank’s target is to enter the top three credit card providers in Vietnam over the next three years. 

Executive of South Korean’s Kookmin Bank in a meeting with Vietnam’s Deputy Prime Minister Vuong Dinh Hue in early September said the bank set to open its branch in Hanoi with investment capital of US$110 million. The bank has acquired Maritime Securities Company in 2017 in a deal worth US$30 million. 

According to the Ministry of Planning and Investment, South Korea is the second largest source of foreign direct investment in Vietnam in the first 11 months of 2018 with US$6.8 billion, accounting for 22.3% of total investment, after Japan with US$8 billion or 25.9% of total investment.