Vietnam central bank approves conversion to general finance company

Expansion into corporate finance, commercial vehicle loans and leasing

Unit to be renamed Lotte General Finance Vietnam

The corporate identity of Lotte Finance Vietnam, the Vietnam subsidiary of Lotte Card. [Lotte Card]
The corporate identity of Lotte Finance Vietnam, the Vietnam subsidiary of Lotte Card. [Lotte Card]

Lotte Finance Vietnam, the Vietnam subsidiary of Lotte Card, has received approval to convert into a general finance company. The move will allow the unit to diversify its revenue base beyond personal loans and credit cards into corporate finance and leasing.

Lotte Card announced Monday that the State Bank of Vietnam approved the conversion of Lotte Finance Vietnam from a consumer finance company to a general finance company on Aug. 28. The unit is the first Korean financial firm operating in Vietnam — and the first consumer finance company in the country — to make such a conversion.

Lotte Finance Vietnam was established after Lotte Card entered the Vietnamese market in 2018 by acquiring Techcom Finance, a local consumer finance company. The Financial Services Commission, the Financial Supervisory Service and the Vietnamese Embassy in Seoul all provided support during the approval process by coordinating with Vietnamese authorities.

The approval allows Lotte Finance Vietnam to expand its business from individual customers to corporate clients and sole proprietors. The company plans to grow its secured and unsecured lending and commercial vehicle loans targeting high-quality corporate borrowers, and to strengthen financial support for commercial electric vehicles in line with the Vietnamese government's green energy policy.

The scope of operations will also broaden. In addition to its existing personal loan and credit card businesses, the company will now be able to enter the leasing market. It plans to move into auto leasing first, then extend financial services to growth industries such as medical devices and construction equipment.

To reflect the expanded mandate, the subsidiary will be renamed Lotte General Finance Vietnam, with the new name applied to its offices and branches on a rolling basis. Starting next year, the company will strengthen its corporate review organization to upgrade its risk assessment framework and expand corporate lending, focusing initially on existing partner companies.

"This upgrade to a general finance company has laid the groundwork for long-term growth through an expanded business portfolio and a more diversified revenue base," Lotte Card Chief Executive Jeong Sang-ho said. "We expect the Vietnam subsidiary's growth to contribute to enhancing Lotte Card's overall corporate value."


forest@heraldcorp.com