Thailand’s KBank Weighs $1 Billion Acquisition of Home Credit Vietnam

Kasikornbank, KBank

Thai bank Kasikornbank is reportedly in talks to purchase consumer finance company Home Credit Vietnam.

That’s according to a report by Reuters, citing two sources who say the potentially $1 billion deal could help Kasikornbank (also known as KBank) with its ambition of becoming one of Vietnam’s top 20 banks in terms of assets by 2027.

Sources told Reuters that KBank has spoken with financial advisors about the potential acquisition, though discussions are ongoing.

“KBank is currently operating KBank Biz Loan solution, a credit service for small-scale retail stores,” one of the sources said. “The potential deal with Home Credit will enable the bank to promote access to financial services for small business clients.” 

The report noted that the potential deal is happening at a moment when banks in Vietnam are being strained by a slow economy and ongoing real estate upheaval, and amid a broader consolidation movement in the Asian finance space.

However, that trend isn’t just confined to one region, as recent PYMNTS’ reporting has observed, with the economy helping usher in a series of unlikely unions in the FinTech space in the coming years.

“Banks have traditionally viewed FinTechs as agile rivals in the digital transformation of banking that has taken place over the last several years, especially as FinTechs rode a massive wave of growth,” PYMNTS wrote earlier this month. “Although banks have been catching up on the technology, many are still fish out of water when it comes to launching state-of-the-art digital financial services, making FinTechs attractive targets for partnership — or ownership.”

Meanwhile, some FinTechs — which have been facing strong economic headwinds since last year — might be seeing acquisition by banks in a positive light as they seek a way to avoid shutting down. 

And banks are not the only ones doing the purchasing, as some leading FinTechs are looking to expand their capabilities via mergers and acquisitions (M&A) with other FinTechs.

But whether they are weighing strategic partnerships or M&A with banks, FinTechs’ first step must be to prepare themselves both financially and for regulatory compliance. 

“This will be critical not only for their own well-being but also for making them stand out in a pool of acquisition candidates, should a bank merger prove their best option,” PYMNTS wrote.

Sezzle CEO Charlie Youakim told PYMNTS in a recent interview that FinTechs’ eligibility for bank acquisition lines up directly with their becoming more “in tune” with regulatory matters. At the same time, FinTechs that fall behind on these requirements could also miss their chance at a mutually beneficial partnership.