Bloomberg reported earlier today that Thai big banks namely, Kasikornbank PCL (SET: KBANK) and SCB X PCL (SET: SCB), altogether with South Korean KB Kookmin Bank, have entered the final stage of an auction to takeover Home Credit Vietnam, which is a non-bank lender, providing consumer loans with 6,000 employees and 12 million customers from over 9,000 branches in Vietnam.
Home Credit Vietnam valuation is around ฿25 billion and if compared to loan firms in Thailand, it estimated to have ฿35 to ฿45 billion worth of loans, which is 1.5% to 2% of total loan of KBANK or SCB. The Vietnamese non-bank’s net profit is expected at ฿1 to ฿2 billion annually or 2% to 4% of KBANK’s or SCB’s net profit.
Analysts from Bualuang Securities (BLS) viewed that both KBANK and SCB are ready to invest as KBANK reported its Q3 cash was at ฿42 billion, while SCB recorded its cash at ฿36 million after Q3. Furthermore, both banks can amass more cash from their depositors as well.
The analyst considered Home Credit Vietnam as a small entity compared to both big banks. Although it might not have any impact in the short-term, it can act as a gateway for the long-term expansion into the Vietnam market which is a growth strategy of many Thai companies.
Meanwhile, Bank of Ayudhya PCL (SET: BAY) reported the completion of purchasing Home Credit in Philippines and Indonesia, as the original owner, PPF Group NV is recalling back to Europe after it backed off from a $1.5billion IPO in Hong Kong.
BLS had a positive view on KBANK and SCB, seeing the current valuation as attractive and also recommended “BUY” on both banks.