HOME CREDIT VIETNAM FINANCE COMPANY LIMITED

The subject is one of the credit services providers for consumers in Vietnam. Currently, its financed products include electronic equipment, motorcycles… Besides, the company has developed more services such as insurance, revolving credit card and especially cash loans for all types of customers. Currently, its distribution network has more than 16,000 retail outlets with more than 6,000 employees, serving 16 million customers. In addition, the subject has cooperated with many payment method providers, namely Payoo with more 3,000 transaction points, MoMo with more 4,000 transaction points, Viettel stores, postal system, and banks having transaction networks nationwide. 

Recently, the company has successfully issued a bond lot with code HCVCL2427001, with an issuance value of VND 1,000 billion, a par value of VND 1 billion/bond, completed on May 31, 2024, term of 36 months. This bond lot will mature in 2027. This is a bond lot with a combined interest rate applied, the first interest period is 7.4%/year. For each subsequent interest period, the interest rate is equal to the reference interest rate of that interest period plus 2.5%/year. This is also recorded as the first batch of bonds issued by the subject in 2024.

On June 5, 2024, the company also completed the issuance of the HCVCL2426002 bond lot, with a value of VND 500 billion. One day later, on June 6, 2024, the company completed the issuance of the HCVCL2426003 bond lot, with a value of VND 500 billion, with a term of 2 years. Thus, within just 6 working days, the company successfully attracted 3 bond lots, with a total value of VND 2,000 billion. Notably, all 3 bond lots are "three no" bonds: Non-convertible, no warrants and no collateral.

Besides, the company is also circulating 3 other bond lots issued in 2022, including:

+ The first lot has the code HCVCL2224001 with an issuance value of VND 600 billion, issued on August 31, 2022, with a term of 24 months and will mature at the end of August 2024.

+ The second lot has the code HCVCL2224002, an issuance value of VND 300 billion, a term of 18 months, issued on September 13, 2022 and due on on March 13, 2024.

+ The third lot has the code HCVCL2224003, an issuance value of VND 200 billion, issued on September 15, 2022, with a term of 18 months and due on March 15, 2024.

It is known that in early 2024, Home Credit Group announced the signing of a conditional framework agreement to transfer 100% of the subject's capital contribution to the buyer, The Siam Commercial Bank Public Company Limited, a member of SCBX Public Company Limited. According to the announcement, the transfer agreement is worth approximately EUR 800 million (approximately USD 866 million) and the transfer is expected to be completed in the first half of 2025, after approval from competent authorities of Vietnam and Thailand. 

According to the media information, up to 31 Mar 2024, there are 16 finance companies. In which, FE Credit made up more than 40% of outstanding loans of finance companies. The subject, HD Saison and Mcredit are in the next position respectively. The company's business is facing more difficulties than rival companies in Vietnam. The reason is that the company does not have the "backing" of the bank, which makes it difficult to access customers as well as preferential loans. Contrary to the subject, many rival companies have the backing of banks. The biggest competitor is FE Credit, which has the backing when the major shareholder is VPBank; MCredit is a subsidiary of MBBank and HDSaison is a subsidiary of HDBank… Therefore, this company must continuously increase mobilization through the bond channel.

The economic difficulties in 2023 led to a not-so-bright consumer finance market, causing the profits of financial companies to decline significantly.  The main reason for financial companies' losses or sharp declines in profits is due to the increase in credit risk provisions and the increase in bad debts. Financial companies mainly lend on credit, and customers are concentrated in the group of workers with unstable incomes. In addition, in the past year, the economy has been quite difficult, the ability to repay debts has also declined, and workers have also tightened their spending more. When debt collection was difficult, financial companies that provide loans would also be more hesitant in lending, lending standards would also be tightened, leading to more cautious and difficult lending.