Fund management acquisitions unlock new edge
Fund management acquisitions unlock new edge
Vietnamese banks are increasingly expanding their investment in fund management and securities firms to diversify their services, unlock new revenue streams, and strengthen their competitive edge.
TPBank in late April presented its proposal to acquire a fund management company at its AGM. According to CEO Nguyen Hung, the acquisition of a subsidiary specialising in fund management is an objective necessity for the bank, ensuring a solid legal foundation and addressing market demands.
Hung emphasised that the acquisition of a subsidiary specialising in fund management was not merely an option but vital. This strategic manoeuvre is poised to fuel TPBank’s pursuit of robust development, fortifying its position within the market and elevating its competitiveness.
TPBank previously integrated TPBank Securities Company (TPS) into its ecosystem, assigning key positions within the company since 2019. Furthermore, TPBank has consistently injected substantial funds during recent substantial capital increases by TPS, ensuring a sustained ownership stake.
The bank’s chairman Do Minh Phu said, “Our current ecosystem encompasses a securities company as a vital affiliate. This year, we have grand plans to acquire a formidable fund management company. This strategic expansion will propel TPBank to ascend as a paramount financial conglomerate, leaving an indelible mark on the industry.”
Likewise, Sovico’s HDBank also revealed its ambition in its recent AGM to acquire a securities company as the bank aims to expand its range of services, diversify its revenue streams, and bolster its service-oriented income through various new activities such as underwriting, financial advisory, corporate restructuring, and asset management.
HDBank emphasised that the stable economic growth of the country served as a favourable backdrop for the development of the securities market.
“Additionally, with the number of securities accounts in Vietnam currently representing only slightly more than 6 per cent of the population, significantly lower than the 10-15 per cent benchmark in other regional and global markets, the untapped growth potential of the Vietnamese securities market is evident,” an HDBank executive said.
This strategic move aligns with the broader trend observed among major financial institutions in developed markets, where expanding into the securities sector has become a common strategy to efficiently meet customer needs while optimising value.
With abundant financial resources following successful equity sales to Japanese partner SMBC, VPBank is implementing its plan to become a top-tier financial conglomerate.
In 2022, VPBank successfully acquired nearly all the shares of ASCS Securities and rebranded it as VPBank Securities. Subsequently, VPBank injected additional capital into the company, increasing its charter capital to VND15 trillion ($638.7 million), making it the largest securities company in Vietnam in terms of charter capital.
“If five years ago marked the era of the banking and consumer finance sectors, the next five years will usher in a new era for securities and investment banking. VPBank, poised at the helm, shall not squander this golden opportunity. We recognise the colossal potential that lies within the realm of professional investment banking,” said VPBank CEO Nguyen Duc Vinh.
According to Vinh, the acquisition and integration of ASCS Securities into VPBank’s ecosystem will diversify the bank’s range of services and aid in its development.
Despite its recent entry into the bank’s ecosystem, he added, VPBank Securities has already contributed over VND500 billion ($21.3 million) in consolidated profits to the group. Given the growth potential of the securities industry, the bank expects VPBank Securities’ profits to triple this year.
On the same note, MB chairman Luu Trung Thai reiterated that MB has no intention of divesting its stake in its securities arm MBS, as it forms the core that fortifies the financial conglomerate’s structure, enabling MB to thrive as a top entity.
Techcombank Securities (TCBS) has outlined a key objective in 2023, which is to pursue a private placement of shares from Techcombank valued at over VND10 trillion ($434.78 million). This issuance is expected to raise the bank’s ownership stake in TCBS to 94.2 per cent.
“The securities company experienced some fluctuations during 2022-2023, but I firmly believe that the market will quickly recover,” said chairman of Techcombank Ho Hung Anh.
The proposed capital increase is scheduled to unfold between the latter part of the second quarter and the early stages of the third quarter in 2023, and expected to propel TCBS into the upper echelons of the securities industry.
Tran Hung Huy, chairman of ACB, unveiled the bank’s plan regarding ACBS – its securities firm – during a recent discussion.
He confirmed that ACB had been exploring the prospect of a capital transfer within ACBS and had been searching for development partners to accelerate growth. However, the unexpected onslaught of the pandemic disrupted the meticulously laid out roadmap, necessitating a temporary postponement.
