Final Report - Vietnam Consumer Finance Report 1H2022 - Home Credit

Vietnam Consumer Finance Market
1H2022 UPDATE
Date of report: 24 October 2022
Prepared by FiinResearch for Home Credit
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FiinGroup
Head Office Ho Chi Minh City Branch
10th Floor, Peakview Tower Unit 4621, Level 46, Bitexco Financial
36 Hoang Cau, Dong Da Tower, 2 Hai Trieu Street, Ben Nghe Ward,
Hanoi, Vietnam District 1, Ho Chi Minh City, Vietnam
telephone: +84 (24) 3562 6962 telephone:+ 84 (28) 3933 3586
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website: www.fiinresearch.vn
Date: October 24th, 2022
To: Ms. Anastasia Fokina

Chief Operations Officer
Home Credit Vietnam Finance Company Limited
We would be happy to provide further information to address any
Re: Vietnam Consumer Finance Market 2022 Final Report questions that you may have on the report. Our ultimate report objective
is to bring real values to your investment and business decisions in the
Dear Ms. Anastasia sector in Vietnam.
I would like to submit our final report on the Vietnam Consumer Should you have any questions, please contact me or our Assistant
Finance Market-1H2022. Manager in charge of consumer finance sector, Ms. Oanh Tran at
+84 (24) 3562 6962 (ext. 105) or her email: oanh.trankieu@fiingroup.vn
The purpose of this report is to keep your company and management
updated on the consumer lending market’s developments, sector Yours sincerely,
performance, key market trends as well as potential market entrants.
We have analyzed and dissected the market from multiple angles,
including the development of retail banking and consumer finance
companies, the development of each product segment, and the
underlying drivers. We have also used the available data on each
industry to help Home Credit define the growth opportunity
segments, hoping that this report would be useful for your company’s Le Xuan Dong
strategic planning in the near term. Director, Head of Market Research and Consulting Services
(“FiinResearch”)
FiinGroup
2
Abbreviation
NO. ABBREVIATION STAND FOR NO. ABBREVIATION STAND FOR
1 1H 1 Half 26 CI Credit Institution
2 1M 1 Month 27 CIMB CIMB Bank Vietnam Limited
3 1Q 1 Quarter 28 CIR Cost-to-Income Ratio
4 2Q 2 Quater 29 CPI Consumer Price Index
5 2W Two-wheeler Comprehensive and Progressive Agreement for Trans-
30 CPTPP Pacific Partnership
6 2WL Two-wheeler Loan
31 D/E Debt to Equity
7 3M 3 Months
32 DSA Direct Sales Agents
8 3Q 3 Quarters
33 ENR Ending Net Receivables
9 3W Three-wheeler
34 EV Electric Vehicles
10 4Q 4 Quarters
35 EVFTA EU-Vietnam Free Trade Agreement
11 4W 4-wheeler
36 FDI Foreign Direct Investment
12 4WL Four-wheeler Loan
37 FinCo Finance Company
13 AI Artificial Intelligence
38 FTA Free Trade Agreement
14 API Application Programming Interface
39 FY Fiscal Year
15 ASEAN Association of Southeast Asian Nations
40 GDP Gross Domestic Product
16 ATIGA ASEAN Trade in Goods Agreement
41 GIC Global Insurance Corporation
17 ATM Automated Teller Machine
42 HAFIC Handico Financial Joint Stock Company
18 AWS Amazon Web Service
43 HCMC Ho Chi Minh City
19 bn billion
44 IMF International Monetary Fund
20 BNPL Buy-now-Pay-later
45 IPO Initial Public Offering
21 bps Basis Points
46 IPS Intermediary Payment Service
22 CAGR Compounded Annual Growth rate
47 JSC Joint-Stock Company
23 CDL Consumer Durable Loans
48 LLP Loan Loss Provision
24 CD Consumer Durables
49 LLR Loan Loss Reserve
25 CF Consumer Finance
50 LNG Liquefied Natural Gas
3
Abbreviation
NO. ABBREVIATION STAND FOR NO. ABBREVIATION STAND FOR
51 Ltd Limited Company 77 PTI Post - Telecommunication Insurance Joint Stock Company
52 LTV Loan to Value 78 PVI PetroVietnam Insurance
53 M&A Mergers & Acquisitions 79 QoQ Quarter over Quarter
54 mn million 80 RCEP Regional Comprehensive Economic Partnership
55 MOF Ministry of Finance 81 ROAA Return on Average Asset
56 MoM Month over Month 82 ROAE Return on Average Equity
57 MOU Memorandum of Understanding 83 RPA Robotic Processing Automation
58 MSIG Mitsui Sumitomo Insurance Group 84 SBV State Bank of Vietnam
59 MUFJ Mitsubishi UFJ 85 SEA Southeast Asia
60 MWG Mobile World Investment Corporation 86 SG&A Selling, General & Administrative Expenses
61 N/A Not Available 87 SIP Service Introduction Points
62 NAPAS National Payment Corporation of Vietnam 88 SMBC Sumitomo Mitsui Banking Corporation
63 NII Net Interest Income 89 SMBC CF SMBC Consumer Finance Company
64 NIM Net Interest Margin 90 SME Small and Medium Enterprise

91 TFS Toyota Financial Services
65 NLB National Loan Book
92 TGDD Thegioididong
66 NPAT Net Profit After Tax
93 TOI Total Operating Income
67 NPL Non-performing Loan
94 trn trillion
68 NPM Net Profit Margin
95 VASS Vien Dong Assurance Corporation
69 NTB New to bank
96 VL Vehicle Loans
70 OPES OPES Insurance Company
97 VNBA Vietnam Banks' Asssociation
71 OPEX Operating Expense
98 VNI Vietnam National Aviation Insurance Corporation
72 P2P Peer-to-Peer
99 YoY Year over Year
73 PJICO Petrolimex Insurance Joint-Stock Company
100 VAMA Vietnam Automobile Manufacturers Association
74 POS Point of Sales
101 VAMM Vietnam Association of Motorcycle Manufacturers
75 PPOP Pre-Provision Operating Profit
76 ppt percentage point
4
CONSUMER FINANCE REPORT 1H2022 – RATIO APPENDIX
No. Ratio Description Formula Note
The original formular of NIM is Net Interest Income

divided by Average Earnings Assets. In this report,
we estimated NIM of FinCos using Average
1 NIM Net Interest Margin Net Interest Income/ Average Outstanding Loans
Outstanding loans as earnings assets of FinCos
mainly include loans, details of small items in
earnings assets are not fully disclosed in all FinCos.
2 NPM Net Profit Margin Net profit After Tax/Total Operating Income
Return on Average
3 ROAA Net profit After Tax/Average Assets
Assets
Return on Average
4 ROAE Net profit After Tax/Average Equity
Equity
Non-performing loans include loan at substandard
Non-performing Loans Total Non ‐ Performing Loans/Total Outstanding
5 NPL ratio loan group (group 3), doubtful loan group (group 4)
Ratio Loans
and bad loan group (group 5)
Loan Loss Coverage

6 LLC Loan Loss Reserve/Non−performing Loans
Ratio
7 CIR Cost To Income Total Operating Cost/Total Operating Income
8 D/E Debt To Equity Debt/Equity
Cost of funding is estimated as expense from credit

9 COF Cost of Funding Expense from credit activities/ Total liabilities activities to total liabilities as details of interest-
bearing liabilities are not fully disclosed.
Loan Loss Provision (expense)/Total operating

10 LLP/TOI
income.
5
Table of Contents
Section Contents Page Section Contents Page
Executive Summary 7 3. Key development trends 38
1. Updates of Vietnam consumer finance market 8 3.1. Product trend | Buy now pay later 38
1.1. Market size and growth 9 3.2. Potential competition from alternative lenders 41
1.2. Market segmentation 11 3.3. Update on M&A activities 45
Competitive landscape of Finance Companies

2. 13 4. Regulatory updates 47
(FinCos)
2.1. FinCos fast facts 14 5. Appendices 49
2.2. Market share, market size and growth 15 5.1. Macro-economic factors 49
2.3. Update on product portfolio development 18 5.2. Key figures of the banking system 55
2.4. Analysis of FinCos’ financial performance 28
6
Executive Summary
1. Vietnam Consumer finance market is on track 3. All CF segments returned to fast-paced growth 6. FinCos recorded NPL hiked due to the continued
for a steady recovery in which Credit Cards and POS loans deterioration of the customer loan portfolio
The consumer finance market has suffered severe outperformed Personal Loans/ Cash
acquired in the pandemic
8.5% 2021 9.6%
setbacks with the pandemic from approaching Loans & Others 9.1%
new-to-bank customers to collecting debts from 7.6% 1H2022
11.9%
existing customers. However, the sector has 11.6% Vehicle Loans (two 5.5%
5.2% 4.9%
gradually regained growth momentum. As of 30 and four-wheeler) 4.7%
June 2022, CF loans outstanding by commercial 13.6%
banks and FinCos approached 2,374trn, registering 14.9%
66.5%
64.6% Consumer Durables 2017 2018 2019 2020 2021 1H2022
an expansion of 12.8% YTD and 19% YoY.
+12.8% YTD 7. Buy now, pay later is poised to thrive as a new
+7.0% YTD (1H2022) customer acquisition & retention channel
(1H2021) 2,374 Credit Card
2,104 1,992 BNPL has emerged globally and is expected to become a
1,861
1,681 4. COVID is a game changer, redistributing the preferred payment option in Vietnam soon, fostered by a
1,414 booming e-commerce market, young and tech-savvy
market share of companies in the sector
generation, and cashless payment trends.
VNDtrn
30.9% 18.9% FE Credit

13.1% 15.4% 19.2% 2021 There exists three typical business models of BNPL
10.7%
1H2022 Home Credit practiced in Vietnam that indulge both Fintech and
9.6%
3.1%
traditional CF lenders: (1) “Direct providers” where BNPL
Mcredit solely operated by fintech players, (2) BNPL platforms
2018 2019 2020 2021 1H2021 1H2022 4.1% 8.6%
3.1% 36.7% acts as connectors between merchants, consumers and
Total Outstanding CF Loans (Excluding Inactive FinCos) 5.2% 4.0% HD Saison
YoY Growth 5.1% 40.0% banks/FinCos and (3) BNPL is designed as a virtual credit
5.8% 5.8% Shinhan Finance line of banks & FinCos.
2. FinCos have been on the mend and ramping up 9.1% In the future, BNPL would be positioned as a new
operations Mirae Asset
9.6% 9.5% customer acquisition & retention channel for FinCos to
+9.6% YTD 14.9%
Toyota Financial cross-sell other products and create an opportunity to
-0.3% YTD (1H2022)
163 Services digitalize their traditional lending products.
11.3% 14.6%
148 (1H2021) SHB Finance
136 135
129 8. Pawnshops' activities flourished posing fierce
29.0% Others competition to mainstream CF providers
100
20.2% 5. NIM slightly recovered but face uncertainty The proliferation of hot loans from pawnshops and
VNDtrn
18.3%
due to the pressure of rising cost of funding alternative lenders are worrying mainstream credit
9.3%
5.2% 5.0% 29.8% providers such as banks and FinCos. Notably, the leading
player F88 has quickly transformed its business model
25.9% 26.6% from a solely pawnshop to a "convenient store" serving
2018 2019 2020 2021 1H2021 1H2022 24.4% comprehensive financial services. The leapfrog of
Total Outstanding CF Loans (Excluding Inactive FinCos) 21.5% 22.1% competitors from the informal market has waken up
YoY growth, % FinCos to reinforce their business model to be more
proactive and adaptive to the new competitive
2017 2018 2019 2020 2021 1H2022 environment.
7
Contents
Section 1: Updates of Vietnam consumer finance market
Page
1.1 Market size and growth 8-10
1.2 Market segmentation 11-12
8
1.1. Market size and growth
Vietnam Consumer finance market is on track for a steady recovery
Figure 1: Total outstanding loans (VNDbn) of consumer finance (CF) Figure 2: Proportion of Banks’ CF and active FinCos
players +12.8% YTD
(1H2022)
+7.0% YTD Banks' CF Active FinCos' CF
(1H2021) 2,373,840
2,103,716 7.1% 7.7% 7.3% 7.1% 6.79% 6.85%
1,991,867
1,860,867
1,681,397
1,413,982
92.9% 92.3% 92.7% 92.9% 93.21% 93.15%

30.9%
18.9% 15.4% 19.2%
10.7% 13.1%
2018 2019 2020 2021 1H2021 1H2022 2018 2019 2020 2021 1H2021 1H2022
Total Outstanding CF Loans (Excluding Inactive FinCos) Source: FiinResearch from SBV’s credit statistics, banks and FinCos’ financial statements.
• The consumer finance (CF) market has gradually regained growth

Source: FiinResearch from SBV’s credit statistics, banks and FinCos’ financial statements.
momentum. As of 30 June 2022, CF loans outstanding by commercial banks
and FinCos approached 2,374trn, registering an expansion of 12.8% YTD and
Figure 3: Growth rate of CF market 19% YoY. The recovery was backed by solid consumer credit demand that
bounced back since October last year when business operations and service
YTD growth YoY growth CAGR
activities turned normal.
1H2022 1H2022 2017 – 1H2022
• Banks contributed to 93% of the country CF loan book, while FinCos secured
the remaining portion. CF concepts are different between these two big
CF 12.8% 19.2% 19.1%
engines: Thanks to a prosperous retail customer database and an ecosystem
Banks’ CF 13.1% 19.1% 19.4% that supports cross-sales, banks serve a higher income segment of the CF
FinCos’ CF 9.6% 20.2% 15.7% sector, offering large items (presented in the next section) while FinCos
portfolio is driven by unsecured loans and low-income customers and hurt
Source: FiinResearch. more in the pandemic, hence takes longer time to recover fully.
Notes: Data covering consumer finance of retail banks and active licensed FinCos.
Alternative lenders such as payday, P2P lenders and pawnshops are not in the coverage. • Going forward, the CF market is poised for a strong recovery by the end of
2022 thanks to the peak season effects and extension of credit growth quota
for some banks and FinCos as announced by SBV by early September.
9
Section 1: Updates of Vietnam consumer finance market CONTRIBUTION TO TOTAL
1.1. Market size and growth OUTSTANDING CREDIT
CF lending portfolio still secure 21% of total credit to the economy
Figure 4: Outstanding credit (VNDtrn) by all credit institutions and its Figure 5: Credit growth (YoY) by segments
growth +9.9% YTD
(1H2022)
+6.4% YTD Retail Corporate CF loans (excl. inactive FinCos)
(1H2021)
13.9% 13.7% 16.8%
30%
15.2%
13.6% 23.7%
12.2%
20% COVID-19 outbreak 19.2%
11,429
10,444 9,785 10.7%
9,193 10%
8,195
7,211
0%
2018 2019 2020 2021 1H2022
2018 2019 2020 2021 1H2021 1H2022
Note: CF loans is part of retail loans
Credit Outstanding (NLB) YoY Credit Growth Figure 6: Contribution of Corporate loans, Retail loans and CF loans to
Source: FiinResearch from SBV.
total outstanding credit
In which,
CF (part of retail 19.6% 20.5% 20.2% 20.1% 20.8%
• Both retail and corporate lending continued witnessed
loans) as % of total
recovery in 1H2022, mainly driven by growth of retail loans outstanding credit
thanks to recovered consumer spending as Covid-19
restrictions were lifted. Recovery momentum of CF lending 55.3% 53.9% 54.2% 52.3% 50.6%
portfolio remained stagnant compared to other segments,
showing the deep toll that the pandemic took on CF customer
portfolio.
44.7% 46.1% 45.8% 47.7% 49.4%
• Contribution of CF to total credit outstanding slightly
increased from year end 2021, contributed to the higher
proportion of retail loans in 1H2022.
2018 2019 2020 2021 1H2022
Retail Corporate
Source: FiinResearch
Data of Corporate loans and Retail loans were estimated from 25 selected banks and 14 active
FinCos whose customer loans accounted for 92% of total outstanding credit (as of 1H2022).
10
Contents
Page
1.1 Market size and growth 8-10
1.2 Market segmentation 11-12
11
MARKET SEGMENTATION
1.2. Market segmentation
1H2022 period of growth set the CF portfolio of both banks and FinCos on a path to recovery
Figure 4: Market size of active FinCos, 2017 – 1H2022 Figure 5: Loan proportion by product of active FinCos, 2021 vs. 1H2022
-0.1% YTD +9.6% YTD 2021
CAGR (2017 – 2021) = 15.1% (1H2021) (1H2022)
8.5%
1H2022 Personal Loans/ Cash
162,570
148,317 11.9% 7.6% Loans & Others
128,908 135,655 135,235
99,952 29.0%
20.2% 11.6% Vehicle Loans (two
VNDbn
FinCos’CF and four-wheeler)

18.3% 9.3% 13.6%
5.2% 5.0% 14.9% Consumer Durables
66.5%
64.6%
Credit Card
2018 2019 2020 2021 1H2021 1H2022
Active FinCos' CF YoY Growth
Source: Estimated by FiinResearch. Source: FiinResearch.
Note: Unlicensed lenders (such as ACS Trading), fintech platforms (such as P2P) or alternative Note: FinCos offer 4 main products: Consumer Durables (Consumer electronics & Home
lenders (such as Doctor Dong), micro-credit funds and people’s credit funds are not included in appliances), Vehicles Loans, Credit Card, and Personal Loans/ Cash Loans and Others.
these figures.
Figure 6: Market size of Banks’ CF loans, 2017 – 1H2022 Figure 7: Loan proportion by product of Banks’ CF, 2021 vs. 1H2022
CAGR (2017 – 2021) = 18.4% +13.1% YTD
(1H2022)
2021
+7.6% YTD 4.5%
31.9% 5.7% Housing/ Home
(1H2021) 2,211,269 1H2022 Improvement Loans
1,955,399 3.9%
5.9%
1,725,212
1,552,490 19.1% Personal Loans/ Cash
1,314,030 18.1% 23.6% Loans & Others
25.5%
VNDbn
13.3% Banks’CF
11.1%
64.8% VehicleLoans
Vehicle Loans(two and
66.2% four-wheeler)
(Auto loan)
Credit Card
2018 2019 2020 2021 1H2022
Banks' CF YoY Growth Source: FiinResearch.
Note: Banks offer 4 main products: Housing/Home improvement loan, Vehicle Loans, Credit
Source: Estimated by FiinResearch from retail banks’ reported data for retail loans with Card and Cash Loans in which Cash Loan include consumer credit for different financing
consumption purpose. purposes such as purchases of consumer durables (home appliances and consumer electronics),
personal overdraft, and other purposes (educational/medical/recreational, etc.,)
12
Contents
Section 2: Competitive landscape of Finance Companies (FinCos)
Page
2.1 FinCos’ fast facts 13-14
2.2 Changes in market positioning 15-17
2.3 Update on product portfolio development 18-27
2.4 Analysis of FinCos’ financial performance 28-37
13
Section 2: Competitive landscape amongst finance companies
2.1. FinCos fast facts
In which
No. FinCo Status Ownership structure Total Charter Capital Loan Book (*) % of CF Loans Market share Market share
Assets (VNDbn) (VNDbn) CF Loans (1H2022) of active of active
(VNDbn) (VNDbn) FinCos FinCos
(exclusive of
TFS)
1 FE Credit 51% local-owned (50% VPBank, 1% Viet Capital
Active Secirities), 49% foreign-owned (SMBC Consumer Finance 79,964 10,928 75,009 59,732 79.6% 36.7% 38.3%
Co., Ltd)
2 Home Credit Active 100% foreign-owned (Home Credit Group) 26,916 2,050 23,660 23,660 100.0% 14.6% 15.2%
3 Mcredit
51% local-owned (50% MBBank, 1% Xuan Thanh CID Co.
Active 23,794 1,300 19,492 18,451 94.7% 11.3% 11.8%
Ltd), 49% foreign-owned (49% Shinsei Bank, Japan)
4 HD Saison 51% local-owned (50% HD Bank, 1% HSC), 49% foreign-
Active 16,629 2,350 15,676 15,676 100.0% 9.6% 10.1%
owned (Credit Saison Japan Group)
5 Mirae Asset Active 100% foreign-owned (Mirae Asset) 11,495 1,000 9,384 8,385 89.4% 5.2% 5.4%
6 Shinhan Finance Active 100% foreign-owned (Shinhan Card) 10,339 616 9,491 9,491 100.0% 5.8% 6.1%
7 Toyota Financial
Active 100% foreign-owned (Toyota Finance Corporation - TFC) 9,486 700 9,061 6,640 73.3% 4.1% 4.3%
Services
8 SHB Finance 100% local-owned (SHB) (Acquisition of 50% stake by
Active 5,380 1,000 4,973 4,973 100.0% 3.1% 3.2%
Krungsri (Thailand) is waiting for approval from SBV)
9 Viet Credit Active 100% local-owned (Individual shareholders) 7,307 688 4,745 4,130 87.0% 2.5% 2.6%
10 JACCS 100% foreign-owned (Japan Consumer Credit Group -
Active 4,854 900 4,551 4,551 100.0% 2.8% 2.9%
JACCS)
11 Lotte Finance Active 100% foreign-owned (Lotte Card) 2,886 1,836 1,222 1,222 100.0% 0.8% 0.8%
12 EVNFinance (*)
(Easy Credit is the 100% local-owned (4.99% Thien Trieu Aria, 4.97% ABB,
Active 36,070 3,247 20,218 2,687 13.3% 1.7% 1.7%
consumer finance 90.04% Others)
brand )
13 PTFinance Active 100% local-owned (SeABank) 3,398 1,056 2,991 2,631 88.0% 1.6% 1.7%
14 FCCOM Active 100% local-owned (MSB) 760 513 393 341 86.8% 0.2% 0.2%
15 HAFIC (*) 100% local-owned (12.7% owned by Handico, 87.3%
owned by other non-state shareholders. Under special
InActive 482 550 21 1 3.9% -
control of the government, shareholders can not -
transfer share without approval)
16 SBICFinance (*)
InActive 100% local-owned (100% SBIC) 292 2,524 4,379 - #N/A
- -
Note: (*) FinCos’ loan books shown above are comprised of loans to individuals, loans to corporates, etc. The numbers we used to calculate their market share in CF are loans to individuals only.
14
Contents
Page
15
FINCOS’ CF LOANBOOK & GROWTH
2.1. Changes in market positioning
FinCos have been on the mend and ramping operations with different stories of recovery
Figure 8: Market size of FinCos (VNDbn), YTD Growth and YoY growth
• As the country's economy has transitioned to a new normal since
1H2022, YTD 1H2022, YoY
late 2021, FinCos have been on the mend and ramping up
operations, but the recovery stories are different among FinCos. 59,732
FE Credit 1.3% 5.6%
The key lies in tapping into the right customers. Also, companies 58,969
with moderate NPL levels in 2021 tend to have larger space to 23,660
boost new loans in 2022 when the pandemic is behind. Home Credit 8.1% 19.6%
21,877
• FE Credit's CF loan balance as of 30 June 2022 expanded about 18,451
5.6% on the low base of 1H2021 and only inched up about 1.3% Mcredit 31.7% 81.9%
14,014
YTD. The Company has restricted Cash Loan disbursements to
NTB customers and promoted POS loans while enhancing 15,676
HD Saison 17.2% 8.9%
collection and risk management over the concern of rising NPLs. 13,376
A considerable portion of FE Credit's loan portfolio incurred by 9,491
Shinhan Finance 11.0% 22.8%
the customers acquired during the pandemic worsened as they 8,551
struggled with their monthly payments. The substantial drop in
8,385 12.2% 12.8%
Cash Loans led to a decline in total CF loans. Mirae Asset
7,475
• Home Credit, maintained healthy growth in 1H2022. The
Company drove on the COVID headwinds to develop 300,000 new Toyota Financial 6,640 13.5% 14.9%
Services 5,851
customers per month and maintains an NPL ratio below the 3%
threshold, which is encouraged by the SBV. 4,973 9.4% 33.5%
SHB Finance
• Mcredit topped the table regarding loan balance growth as the 4,545
Company has successfully leveraged MB Group's comprehensive 4,551 1H2022 34.3% 35.8%
financial ecosystem. By the end of June, Mcredit's customer base JACCS
3,389 2021
reached 2 million customers, almost doubling the year-end 2020's
figures, over 89% of which are using different services in MB 4,130 16.6% 25.2%
Viet Credit
3,544
Group, such as payment products, insurance, and securities.
• Small Fincos get the point to recoup quickly after the pandemic. 6,881 21.5% 127.6%
Others
Easy Credit attained 3-digit growth, offers loans via ViettelPost 5,663
app with fully online journey. PTFinance also promises growth Sector avg. = 10.4% Sector avg. = 20.2%
Source: FiinResearch. (1H2022) (1H2022)
potentials in the time to come by putting more efforts into Note:
digitalization. The Company teamed up with Digitel to push up 1. Others includes Lotte Finance, Easy Credit (EVN Finance’s consumer finance division), FCCOM,
appraisal and disbursement process, as well as seeking and PTFinance.
2. These figures include CF loan book of 14 active FinCos and do not include inactive FinCos under
contractors for projects “VoiceBot” and “Mobile for Customer”.
special control of SBV (HAFIC and SBICFinance) as well as the unlicensed and alternative lenders.
3. FinCos’ institutional loans or syndicated loans with parent banks are excluded to better reflect
CF loan book and calculate CF market share.
16
MARKET SHARE
2.1. Changes in market positioning
COVID is a game changer, redistributing the market share of companies in the sector
• FE Credit remained the market leader despite a slowdown in the past 12
Figure 9: Market share of FinCos, 2021 vs. 1H2022
months. Due to its huge loan portfolio, it will take a longer time for this
giant to recover fully. In the short run, the Company has kicked off its plan
FE Credit for revival by approaching customers of Japanese companies within SMBC's
2021 ecosystem, preferential credit packages to support workers after the
1H2022
Home Credit pandemic and the project with Ubank (digital bank of VPBank targeting MSME
and mass customers) and the Smartpay (e-wallet with over 400,000
Mcredit merchants) to provide credit to customers of these partners . With the
participation of the Japanese strategic shareholder (SMBC), in the next 5-10
HD Saison years, FE Credit is oriented to aim for stable and sustainable growth instead
5.2% 36.7% of rapid growth for the expansion of market share.
5.1% 2.4% Shinhan Finance
2.3% 40.0% • Mcredit keeps threatening the top 2 with spectacular growth regardless of
5.8% 5.8%
Mirae Asset COVID headwinds. The Company has distinct competitive advantages in which
9.1% the most significant benefit comes from the access to a database of 10+
Toyota Financial Services million existing customers of MB Group, an ecosystem that provides a variety
9.6% 9.5% of financial services from banking and consumer finance to fund
14.9%
SHB Finance management, securities and insurance. This is a high-quality source of
customers whose profiles are verified, which helps Mcredit minimize
11.3% 14.6% JACCS acquisition costs.
Viet Credit • In the short run, the competition among the top 4 FinCos will be fierce. FE
Credit and HD Saison are expected to enhance their market positioning with
Others some promising projects ahead. FE Credit and HD Saison have joined hands
with the Viet Nam General Confederation of Labour to deploy a loan package
Source: FiinResearch. of 20trn (10trn for each) with an interest rate reduced by 50% compared to
Note: Others include Lotte Finance, Easy Credit (EVN Finance’s consumer the current interest rate for workers working in industrial parks nationwide.
finance division), FCCOM, and PTFinance. Market share is calculated According to FE CREDIT, 3 product packages will be offered, including Cash
based on CF outstanding loans rather than total customer loans (FinCos’ Loans, Credit Cards and instalment products. Preferential loan packages will
institutional loans or syndicated loans with parent banks are excluded to
reflect CF loan book better and calculate CF market share). have a limit of 10 - 70 million VND with flexible terms from 6 to 24 months.
• JACCS has not aggressively encroached on the market despite its presence in
Vietnam for over ten years. In the first six months, however, the Company’s
loan book grew by 32.4% YTD and successfully acquired an additional 0.4%
market share. Besides its traditional vehicle loan products, personal loans
with specific purposes such as tuition fees, health and beauty, and
construction materials via collaboration with suppliers in these areas
significantly contributed to the given expansion. 17
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18
FINCOS’ PRODUCT MIX
2.3. Update on product portfolio development
The first half of 2022 marked the recovery of all CF segments to fast-paced growth in
which Credit Cards and POS loans outperformed
Figure 10: Market segmentation by product (VNDbn) & YoY growth YTD 13.0%
34.0%
YTD 20.8% 28.7%
19.0% 21,526 24,285 14.9%
21,215 21,016 20,104 14.9%
12.8% 13.6% 11.9% 17,157 14,462 19,384
10.3% 13,326
11.6% 13,448 9.4%
-0.9% -4.3%
15.5%
9.8% 8.5% -0.9%
2019 2020 2021 1H2021 1H2022 7.8% 7.6%
2019 2020 2021 1H2021 1H2022
Vehicle Loans (two and four-wheeler)
66.8% Consumer Durables YoY Growth
YoY growth
125.2%
YTD 6.5% 66.5% YTD 22.3%
28.4% 105,073
90,682 98,677 88,514 2020 28.9%
85,323 64.6% 19.1% 6.4% 14.9%
2021
18.7% 1H2022 13,838
8,922 10,630 11,314 10,732
6.3% 8.8% Personal Loans/ Cash Loans & Others
-2.1%
Vehicle Loans (two and four-wheeler)
2019 2020 2021 1H2021 1H2022 Consumer Durables 2019 2020 2021 1H2021 1H2022
Personal Loans/ Cash Loans & Others Credit Card
YoY Growth Credit Card YoY Growth
Source: FiinResearch.
• Overall, Cash Loan held the largest contribution to FinCos’ loan book thanks to its profitability (high-interest margin, low associated expenses and simple
procedures). Moreover, consumers tend to have a high demand for cash to finance different purposes after the pandemic; hence Cash Loan is considered a
suitable product to serve customers in both acquisition and cross-sales/retention channels during this period. However, FinCos have not disbursed Cash Loans
as aggressive as before the pandemic to control NPLs potentially rising from subprime borrowers as well as regulatory restrictions (Circular 18/2019). CF
players have taken initiatives to increase the proportion of loans with indirect disbursements (CDL, 2WL, Credit Cards, etc.) [find details on next page]
• Vehicle Loans and Consumer Durable Loans acquired 1.3ppt and 0.3ppt of market share in 6 months driven by both supportive demand and supply sides: (1)
Demand recovered post-pandemic, especially for consumer discretionary goods; (2) FinCos paying more attention to diversification of their product portfolio.
• Meanwhile, Credit Cards continued to reveal potential thanks, gaining 3.5ppt thanks to cross-selling between products employed as a typical strategy by
Fincos to grow this market segment: 1. Selling conventional products (CDL, 2WL, 4WL) at the first touch point and then offering Cash Loans or Credit Cards to
existing customers with good credit history.
19
TRANSITION IN PRODUCT PORTFOLIO
Cash Loan share has been narrowed down in loan portfolio of major FinCos as a result of
their initiatives in compliance with Circular 18/2019
Figure 11: Product mix of 7 major FinCos (excl Toyota Financial which focuses on 4WL and SHB Finance which focuses on Cash Loans)
2020 0.7%
2021 3.1% 0.9% 0.1% 4.9%
14.3% 13.0%
1H2022
11.8% 2.0% 9.0% 1.0% 27.4% 0.1% 3.2%
27.7%
24.3%
8.2% 9.4% 28.0% 2.0%
11.5%
5.4% 27.1% 17.0% 9.2% 23.1%
7.4% 18.0% 22.9% 43.0% 47.1%
6.9%
7.4% 62.4%
8.4% 67.5% 51.0%
75.8% 7.0% 33.9% 100.0%
63.0% 73.0% 24.6%
71.9% 6.9% 68.1%
96.7%
61.3% 25.4%
70.0% 94.4%
Personal Loans/ Cash Loans & Others Vehicle Loans (two and four-wheeler) Consumer Durables Credit Card
• FE Credit observed a rise of 22.6% YTD in credit card segment to reach 14.3% due to the transition
from CDL and Cash Loan. By the end of June 2022, FE Credit attained 1.1 million of card users,
representing 83.3% YoY.
• Home Credit is strongly promoting credit card segment. The Company has also launched its BNPL 0.1%
products at a small ticket size via e-commerce partners (e.g., Tiki). BNPL is expected to be a good 13.7% 2.3%
acquisition channel to acquire customers before offering them traditional CF products later. 21.0%
2.1% 12.9% 0.1% 3.1%
• Mcredit continued to explore the huge customer database of MB Group and Viettel Group and its 2.4% 12.3% 26.5%
supplier network to diversify its portfolio. CDL was the most promoted product in 1H2022. 2.3% 3.8%
30.8%
• HD Saison portfolio has a flexible transition between product categories. During the pandemic, the 0.2%
Company lent more Cash Loans to compensate for the slowdown of 2WL and CDL when their POS 65.3%
85.4%
were closed in mass. HD Saison has recently come back to exploit its strong product segments
84.7% 70.3%
leveraging a widespread network of 24,000 POS nationwide.
• Shinhan Finance and JACCs witnessed its vehicle loan segment surge by 69.6% and 44.2% YTD, 84.2% 76.6%
respectively thanks to the strong recovery of the auto retail market. Mirae Asset did not promote
this product in 1H2022 due to limited credit limit, making it prioritize smaller ticket-size products.
20
CONSUMER DURABLES
Rivalry in CDL segment is getting fiercer given the expansion strategies of major FinCos
Figure 12: Market share in Consumer Durables, 2021 vs. 1H2022 Figure 13: Growth of Consumer Durables amongst active FinCos
1H2022 1H2022
0.34% 0.01% Home Credit Consumer Durables
2021 YTD Growth YoY Growth
1H2022 FE Credit Home Credit 6.9% 11.2%
12.4% FE Credit -11.3% 83.1%
33.8% HD Saison
HD Saison 32.1% 22.8%
35.7%
18.9% Mcredit Mcredit 90.2% 167.3%
0.04% 0.02% Mirae Asset 19.3% -22.1%
22.2% Mirae Asset
32.3% Shinhan Finance (*) 871.2% 1549.8%
Shinhan Finance
JACCS -10.2% -40.9%
25.4%
JACCS Sector avg. 13.0% 34.0%
Source: FiinResearch. (*) Shinhan Finance figures look odd as it just penetrated CDL segment in 2021, hence recording
an exponential growth
Figure 14: Selected (*) retail chains’ number of stores and YoY growth
of net revenue, 2019 – 1H2022 • CDL continued the growth momentum since the last October when retail chains
went on reopening and opening brand new stores with multiple promotions. The
22.4%
demand for electronics remains high as many schools and companies maintain a
996
1,067 1,992 2,131 hybrid (combined online and offline) working mode. Furthermore, the pandemic
980 1,731
936 1,427 8.7% seems to be a chance for FinCos to go digital and boost sales: Customers now can
913 1,018 -0.8% 5.0% 14%
22% easily shop for electronics products via e-commerce or retailer websites, hit the
-4.0% - 7.0% 8.0% button for instalment loans with major Fincos (Home Credit, Mirae Asset, etc., ).
11.1% Moreover, consumer demand to stay up to date with new smartphone models is a
2019 2020 2021 1H20211H2022 2019 2020 2021 1H2021 1H2022 driving factor in the CDL segment. Credit demand tends to increase by a quarter
surrounding the release date of new flagship phones; thus, the launch of iPhone
14 in Q3 is anticipated to help boost growth for the year.
37.7%
728 • The temporary slowdown of FE Credit created a chance for its competitors to get
593 595 625 Note: Dien May Xanh provides both consumer
31% electronics and home appliances, Thegioididong ahead and grab market share in CDL segment. HD Saison, Mcredit and Mirae
647 and FPT Shop focus on consumer electronics. Asset made good examples for taking this opportunity. HD Saison experienced
12.6%
5.4% (*) The number of stores of these selected retail
-16.4% 32.1% YTD growth in 1H2022 to reach 22.2% market share, in line with the
chains accounted for 88% of total retail chains in
2019 2020 2021 1H2021 1H2022 1H2022 (FiinResearch estimated). continuously expanding brick-and-mortar network of 1,270 POS added. Mcredit,
successfully leverage the MB Group ecosystem for expansion as mentioned .
Meanwhile, Mirae Asset continued the success in collaboration with FPT Shop in
offering CDL via both online and offline channels.
21
VEHICLES LOANS
Vehicles loan segment is becoming increasingly fragmented given the penetration of more
FinCos
Figure 15: Market share in Vehicles Loans (two and four-wheeler), Figure 16: Growth of Vehicles Loans (two and four-wheeler) amongst
2021 vs. 1H2022 active FinCos
0.7% 0.6% 2021 Toyota Financial Services 1H2022 1H2022
1.9% Vehicles Loans (two and four-wheeler)
1H2022 YTD Growth YoY Growth
FE Credit
6.7% Toyota Financial Services 13.5% 14.9%
1.4% 27.3% HD Saison
FE Credit 9.3% 1.1%
13.7% 7.6%
29.1% JACCS
11.9% HD Saison 21.0% -8.4%
0.7% Mcredit JACCS 46.3% 54.7%
11.9%0.9%
Home Credit Mcredit 39.0% 32.1%
14.4%
16.4% 20.2%
Shinhan Finance Home Credit 6.9% -4.9%
18.3%
16.4% Mirae Asset Shinhan Finance 69.6% 214.2%
Others Mirae Asset -0.6% 0.5%
Sources: FiinResearch.
Note: TFS, Shinhan Finance and Lotte Finance offer 4-wheeler loan (4WL) only, other players mostly offer 2WL, except JACCS and Mirae Asset with a small portion of 4WL. Others include Lotte
Finance and Easy Credit.
• Toyota Financial Services remained the top player in the 4WL market of FinCos and recorded double-digit growth in terms of loan balance thanks to the robust growth
of the retail auto market (details on next page). The Company offers 4WL as one single CF product category and competes with commercial banks rather than FinCos
in this segment, considering loan book size. Nonetheless, the 4WL market is getting crowded as younger FinCos attempt to expand to this segment to diversify their
loan portfolio and reduce reliance on Cash Loans. By June 2022, Shinhan Finance recorded a total balance of around VND464bn in 4WL, translating into a jump of
214% on the low base of 1H2021 and nearly 70% compared to the end of 2021.
• The VL market has become fragmented as more and more FinCos try to penetrate this segment, as this is considered an acquisition touch point that allows FinCos to
enhance their customer base. Except for Mirae Asset, which determined to prioritize other products (CDL, 2WL, Cash Loans, Credit Cards) rather than Vehicle Loans
during this period due to the limited credit growth quota, other FinCos posted significant recovery in this segment, facilitated by rising demand for changing vehicles.
Since late 2021, the Hanoi Department of Natural Resources and Environment has implemented the program "Pilot for testing emissions of old motorcycles circulating
in the city“; accordingly, old motorbikes registered for the first time before 2002 are encouraged to switch to new vehicles and receive a subsidy of VND4mn.
• However, the segment still faces saturation effects from the retail market of ICE motorcycles, which has happened for a few years; hence, major FinCos started their
expansion plan to e-vehicle to continue the growth story in the future. HD Saison, Home Credit, Easy Credit have been exploring auto finance solutions for EVs under
collaborations with VinFast, but mainly in e-2Ws. Notably, Shinhan Finance has been found partnering with VinFast and Huyndai Thanh Cong for development of
financing solutions for E-cars.
22
VEHICLES LOANS
Shift in demand from two-wheelers to four-wheelers, along with supportive policies may
keep auto loan growth outweighing
Figure 17: Two-wheeler sales volume (mn) and YoY growth Figure 18: Four-wheeler sales volume (‘000 units) and YoY growth
CAGR 2018 – 2021 = -9.7% CAGR 2018 – 2021 = 4.1%

3.4 3.3
9.5% 402.9 394.8 383.4 27.5%
2.7 25.6%
3.5% 2.5 340.3
2.9% 18.4%
-3.9% 236.6
20.9% 185.6
-8.1% 1.4 1.4
-2.0% -2.9%
-16.7%
2018 2019 2020 2021 1H2021 1H2022 2018 2019 2020 2021 1H2021 1H2022
Two-wheelers sales volume (mn) Two-wheeler sales volume YoY growth Four-wheelers sales volume ('000 Unit) Four-wheelers sales volume YoY growth
Source: FiinResearch from VAMM. Source: FiinResearch estimated from VAMA plus the number of VinFast car and Hyundai TC car.
• Two-wheeler market witnessed a saturation period with one-digit growth pre- • Auto sales volume hit double-digit growth in 1H2022, which set the market back
pandemic, then seriously dampened by lockdown and social distancing orders in relative to the pre-pandemic level. The uplift was supported by the policy of a 50%
2021. The global chip shortage in the same year jacked up vehicle prices, hitting reduction on the registration fee for domestically manufactured and assembled cars
rock bottom in the last ten years. In 1H2022, motor vehicle prices stabilized as guided by Decree 103/2021, effective between 1 Dec 2021 and 31 May 2022.
thanks to the pandemic recovery and chip shortage easing as China, the world’s • The emergence of VinFast e-car models is considered a premise for transitioning
leading semiconductor manufacturer, resumed production. The consumption of from cars usig internal combustion engines (ICE) to environmentally friendly electric
two-wheelers is expected to continue sideways and may turn around at the end of vehicles (EV) in Vietnam. KIA also plans to distribute the KIA EV6 electric car in
2022 or early 2023, given the sign of global chip recovery. Vietnam by late 2022. Toyota, Volvo, etc., also launched Hybrid (gasoline-electric)
car product lines before officially joining the world of EVs.
• In the long term, the two-wheeler retail market is forecasted to experience a
saturation trend and regulatory restrictions that hamper the sales growth of this • The transition to EVs facilitated by Government’s supportive policies. In line with
product. For instance, the Government’s “Resolution 48/NQ-CP on traffic safety the global trend of reducing the reliance on ICE vehicles due to its environmental
and traffic congestion prevention in the period 2022-2025” mandated related impact, the Vietnamese Government laid down Decree 10/2022 stipulating
government bodies to develop a scheme on zoning restrictions for motorbikes preferential registration fees and special consumption tax on the electric car over
based on the infrastructure and capacity of the public passenger transport the next five years, in particular: From 01/03/2022 to 28/02/2025: 0% registration
system, towards a roadmap of banning motorbikes in some districts after 2030. fee; 01/03/2025 to 28/02/2027: 50% of the registration fee for gasoline vehicles
with the same number of seats.
• Therefore, the development and promotion of financing products for EVs could be a
potential growth area. Starting points could be designing preferential loan packages,
targeting ESG-oriented corporate customers, etc. Auto finance could be integrated
into the ecosystem of auto distributors as a payment solution. 23
Cash LoanS
FinCos continuously took initiatives in reducing the proportion of Cash Loans in compliance
SBV’s timeline at Circular 18/2019
Figure 19: Market share in Cash Loans, 2021 vs. 1H2022 Figure 20: Growth of Cash Loans amongst top Cash Loans players
FE Credit 1H2022 1H2022

7.2% Personal Loans/ Cash Loans & Others
YTD Growth YoY Growth
4.7% Home Credit
FE Credit -1.3% -2.4%
6.7% 6.4%
4.6% Mcredit Home Credit 6.9% 25.7%
6.4%
7.0% 6.9% 39.8% Shinhan Finance
43.0% Mcredit 22.8% 90.2%
8.4% HD Saison Shinhan Finance 8.4% 18.3%
8.5%
10.4% Mirae Asset Mirae Asset 11.5% 22.1%
14.0%
SHB Finance HD Saison 8.1% 12.8%
12.0%
14.0% Others SHB Finance 9.4% 33.5%
Note: Others include Lotte Finance, Easy Credit, JACCS, FCCOM, and PTFinance.
• Cash Loan growth resumed significantly in 1H2022 on the low base of last year and slightly inched up compared to the end of 2021. However, the overall
proportion of Cash Loans out of FinCos’ loan book has continuously followed a downward trend as FinCos strived to lessen their dependence on this product.
Moreover, the impact of COVID on the economy forced FinCos to become more conservative in cash disbursement, resulting in a less aggressive growth rate
compared to previous periods.
• 1H2022 saw a redistribution of Cash Loan market share from FE Credit to smaller players. Over the concern of rising NPL, FE Credit restricted Cash Loan
disbursement to new-to-bank customers during the pandemic to mitigate credit risk, which gave other players room to expand their market share. Inheriting
the core system from MB Bank (MBbank), together with the experience of transaction processing of Shinseibank from Japan, Mcredit successfully launched a
credit line product that is designed with different credit limits tailored for various customer profiles leveraging customer analytic platforms and digital
solutions deployed across the entire customer journey. Other FinCos also tried to convert some loan portion of Cash Loans to Credit Cards and indirect loans
(Mirae Asset’s acceleration in CDL; Easy Credit’s partnership with VinFast to launch new vehicle loan, etc.) to diversify their product portfolio while cutting
down the proportion of Cash Loans as required.
• FinCos also focused on small ticket-size Cash Loan items (less than VND20mn) to navigate regulations at Circular 18/2019 (prescribing a maximum percentage
of Cash Loans out of total customer loan balance in 2022: 60%, 2023: 50%, from 2023: 30%, applicable to customers with an outstanding balance of this loan
product exceeding VND20mn)
24
Cash LoanS
FinCos have continuously launched innovative products and solutions to enhance market
positioning in Cash Loan segment
Small FinCos started offering online Cash Loan Advantages of revolving Cash Loan over traditional Cash Loans
✓ Processed online, fast, no complicated paperwork, no income proof required Customers FinCos
✓ Various credit packages with different credit limit based on customer profiles ➢ Enjoy revolving and “on-demand” credit ➢ Grow loan balance per customers
➢ Borrow and pay back many times within ➢ Control and adjust credit limit base on
Leading FinCos made one step further: the loan term customer profile and credit history
➢ Borrow more within the limit without ➢ Enhance customer experience and loyalty
✓ Offer revolving Cash Loan (grant a credit limit within a period and contract renewal ➢ Optimize business efficiency thanks
✓ Disburse by customer demand within the pre-determined credit limit ➢ Pay minimum amount instead of the same recurring revenue from existing customers
amount every month, hence having
Case Studies: Recent developments of FinCos in credit card segment flexibility and reduce financial burden
Speedy disbursement (“Vay dễ duyệt nhanh”) Revolving cash (“Tiền mặt xoay vòng”)by Mcredit via Viettel Money
❖ September 2022: PTF cooperated with DigiTel to launch 2 ❖ July 2022: Mcredit Finance Company has cooperated
product named Cashloan DOP LR and Cashloan DOP HR with with Viettel Money to officially launch a 100% online loan
speedy disbursement by thanks to deployment of digital solutions product, with a limit of up to VND15mn.
to reduce approval time ❖ Terms & conditions
❖ Terms & conditions • Credit Limit from VND5-15mn, allow customers to pay
• Credit limit of up to VND20mn back and disburse many times within 12 months
• Eligibility: Vietnamese from 22-60 years old with Citizen ID card, • Eligibility: Vietnamese from 18-65 years old with Citizen
Social insurance income of VND3mn or more ID card, Social insurance income of VND3mn or more
FastMoney by Easy Credit “Disbursement by credit limit” (“Giải ngân hạn mức”) via APP Đu Đủ
❖ 2021: Easy Credit collaborated with service provider Amber ❖ August 2021: Mcredit’s mobile APP called APP Đủ Đủ integrated
Fintech - a pioneer in providing reputable financial services, to a new feature "Disbursement by credit limit”
launch a fast loan product called FastMoney, on the MoMo Super
❖ Terms & conditions:
App platform.
• Credit Limit from VND10-70mn
❖ Terms & conditions:
• Loan term: 6-36 months
• Credit limit: VND2-20mn
• Eligibility: Vietnamese people with income of VND3mn or more
• Tenure: up to 18 months
• Eligibility: Vietnamese Citizen ID card
25
CREDIT CARD
FinCos compete for every piece of the pie to have a strong foothold in credit card segment
Figure 22: Market share in Credit card loans, 2021 vs. 1H2022 Figure 23: Growth of Credit Card amongst top credit card players
1.3% 0.8% 1.0% 1H2022 1H2022
Credit Card
1.2% YTD Growth YoY Growth
0.9% 1.0%
2021 FE Credit FE Credit 22.6% 28.8%
5.3% 1H2022
Viet Credit Viet Credit 16.6% 25.2%
3.9%
Home Credit Home Credit 67.3% 62.3%
29.8%31.3%
Mcredit Mcredit 30.6% 38.9%
61.7%
61.9% JACCS Lotte Finance 17.4% 37.6%
Others JACCS 0.1% -11.2%
Note: Others include Lotte Finance, HD Saison and FCCOM.
• FE Credit with a huge base of 1.1 million credit card users secured 62% of the market share and 29% of growth compared to the same period last year despitethe
slowdown in other segments. The credit card spending value and loan balance is expected to accelerate in the time to come when FE Credit executes the
collaboration with Ubank (digtal banking division of VPBank) and Smartpay e-wallet. Customers using CASA products of Ubank can explore various products of FE
Credit including Credit Cards. Also, QRcode of FE Credit’s virtual Credit Cards will also be placed on POS of over 400,000 merchants of Smartpay so that its customers
can can and pay for goods and services.
• VietCredit continued to secure nearly 30% of the market share in the credit card segment, thanks to maintaining the 2-digit growth of its domestic credit card
product, despite a slowdown due the concern about rising NPLs driven by the pandemic. Viet Credit has pursued a unique strategy by offering a single product known
as cash cards targeting low-income customer segments, which helped the Company acquire a 2.5% market share of the total CF market after four years after its
launch in May 2018. Since late 2021, the Company has dynamically updated its products to streamline the customer journey, of which the most important updates
include launching an e-contract and adding an online payment function to its domestic Credit Cards (up to VND50mn per day). Recently, VietCredit has set up its first
auto-lending machines at Vietnam Post offices which helps simplify procedures, reduce operating expenses as well as bring credit card products to rural and remote
areas. The Company has also partnered with Kredivo to develop BNPL product, which is expected to boost loan growth in the coming time.
• Home Credit is among the most active card issuers in the credit card market. The Company quicky captured the cashless payment trend, especially since the COVID-
19 outbreak by digitalizing customer journey for this segment. Customers can stay at home and register for a virtual credit card via Home Credit Mobile APP and wait
for approval within 30 minutes for a qualified application. Home Credit also designed various promotion campaigns that suit different customer portraits. Thanks to
that, total Credit Cards issued by the Company has reached 400,000 by June 2022, doubling the same figure in 2020, helping Home Credit loan balance grow sharply
by 67% YTD and 62% YoY and expand its market share by 1.4%. The Company has embarked on digitalizing its products with Credit Cards as the core product.
26
CREDIT CARD
2.2. Transition in product portfolio
Given low penetration, credit card segment remains a fertile land for more FinCos to tap
into
Launch date
04/2015 12/2015 12/2017 04/2019 08/2019 08/2020 2021 08/2022

• The COVID-19 has changed consumer behavior from shopping offline to online in
which the proportion of consumers using card payment increased sharply from 20% to
Figure 22: Credit card penetration (%) by country, 2021E 24% according to a survey about e-commerce by MOIT.
• However, Credit card penetration rate in Vietnam remained modest compared to
Japan 337% regional peers: While adults in mature markets like Japan, and South Korea might
hold more than 2 Credit Cards each, only one out of ten Vietnamese owns a credit
South… 259%
card, signaling robust growth potentials.
Singapore 179% • Going forward, credit card segment is expected to play vital part in digital
China transformation of FinCos, following the effectiveness of Circular 17/2021 developing
135%
a legal framework for electronic card issuance.
Thailand 45%
Recent developments of FinCos in credit card segment
Malaysia 44% • Shinhan Finance: As of 30th August 2022, Shinhan Finance cooperated with Mastercard
Vietnam 10% launched The First – an international credit card allowing Shinhan customers to make
payments for all domestic and international transactions with many privileges and
Philippines 9% incentives.
Indonesia 8% • Fe Credit: By early July 2022, FE Credit launched a new credit card called "LO GI",
which grant a credit limit of VND12mn and allows customers to be free of the annual
India 7%
fee forever and completely exempt from all fees if they pay total spending amount by
Source: FiinResearch, VNBA, Euromonitor International, World Bank due date. Customers also opt to pay a fixed amount of VND600,000 (including 198,000
Note:
for management fee of outstanding balance) and 165,000 for late payment fee.
• Credit card penetration is calculated by total number of Credit Cards in circulation divided
by Population of age 15 or above. • FCCOM: Last year, the credit card segment of FinCos welcomed FCCom as a newbie in
• Credit Cards in circulation includes activated valid Credit Cards issued by credit the market. The Company has so far recorded a modest loan balance of VND100mn by
institutions by the end of reporting period. The number of Credit Cards in circulation
covers 40 banks who are members of VNBA and 4 out of 9 FinCos having credit card business 30 June 2022.
in 2021 namely FE Credit, Viet Credit*, Home Credit, JACCS (accounting for 97.8% market • Mirae Asset: After launching its BNPL product called Mirae Asset Credit last November á
share in 2021). This figure is exclusive of Mcredit, Lotte Finance, HD Saison and FCCOM. sthe first phase of its credit card roadmap. The Company will soon launch its virtual and
• Viet Credit’s number of Credit Cards were estimated using 2020 figure.
• Adult population is calculated using 2020 figures. physical card by the end or this year or early next year. Its credit card offer payment
function for its existing customers at more than 19,000 POS of affiliate partners
(FPTShop, Thegioididong, Nguyen Kim, Esport, etc., ) nationwide.
27
Contents
Section 2: Competitive landscape of Finance Companies

(FinCos)
Page
28
SUMMARY OF FINANCIAL INDICATORS
2.4. Financial benchmarking
BUSINESS RESULT
ENR (VNDbn) (*)

Total operating income Net interest income Operating expense Net profit after tax
(TOI) (VNDbn) (NII) (VNDbn) (OPEX) (VNDbn) (NPAT) (VNDbn)
2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022
FE Credit 75,411 75,009 16,397 8,439 14,922 7,756 4,674 2,824 313 220
Home Credit 21,877 23,660 5,486 3,639 5,074 3,326 2,693 1,474 550 584
Mcredit 15,118 19,492 3,474 2,847 3,235 2,554 1,183 866 480 481
HD Saison 13,376 15,676 4,682 2,731 3,873 2,249 2,058 1,040 800 486
Shinhan Finance 8,551 9,491 1,857 1,042 2,019 1,131 568 288 234 99
Mirae Asset 8,538 9,384 2,594 1,422 2,234 1,223 736 490 128 93
Toyota Financial Services 8,098 9,061 481 244 504 254 105 60 184 112
SHB Finance 4,545 4,973 1,269 767 1,130 685 460 218 26 53
Viet Credit 3,548 4,745 1,167 687 1,202 648 484 275 37 29
JACCS 3,389 4,551 838 466 818 419 510 280 31 50

Source: FiinResearch
Note: (*) FinCos’ loan books (ENR) shown above are comprised of loans to individuals, loans to institutions, financial leasing.., the numbers we used to calculate their market share in CF are
loans to individuals only.
29
SUMMARY OF FINANCIAL INDICATORS
2.3. Analysis of FinCos’ financial performance
EARNING CAPITAL
PROFITABILITY ASSET QUALITY EFFICIENCY
QUALITY STRUCTURE
NIM = ROAA = ROAE =
NII/Average NPM = NPAT/TOI NPAT/Average NPAT/Average NPL Ratio LLP/TOi CIR = OPEX/TOI D/E
Loans Assets Equity
2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022
FE Credit 21.1% 20.6% 1.9% 2.6% 0.4% 0.6% 2.0% 2.8% 14.1% 15.6% 69.1% 62.7% 28.5% 33.5% 3.9 4.0
Home Credit 25.1% 29.2% 10.0% 16.0% 2.2% 4.4% 11.2% 21.4% 4.7% 2.5% 38.3% 38.9% 49.1% 40.5% 4.1 3.7
Mcredit 25.6% 29.5% 13.8% 16.9% 3.0% 4.5% 28.8% 45.3% 6.2% 6.5% 48.6% 48.5% 34.1% 30.4% 9.0 9.1
HD Saison 28.1% 30.3% 17.1% 17.8% 5.3% 6.3% 23.1% 24.7% 7.3% 7.0% 34.7% 39.6% 44.0% 38.1% 3.0 2.8
Shinhan Finance 25.5% 25.1% 12.6% 9.5% 2.7% 2.0% To update

9.4% 7.4% 11.4% 7.6% 53.6% 60.5% 30.6% 27.6% 2.6 2.8
Mirae Asset 28.1% 27.3% 4.9% 6.5% 1.3% 1.7% 9.2% 11.2% 7.0% 6.9% 65.5% 57.4% 28.4% 34.5% 6.0 5.8
Toyota Financial
Services 6.3% 5.9% 38.3% 46.0% 2.1% 2.5% 13.4% 14.7% 3.5% 2.3% 30.1% 17.9% 21.8% 24.6% 4.8 5.0
SHB Finance 27.4% 28.8% 2.0% 6.9% 0.5% 1.8% 2.4% 9.9% 10.8% 10.9% 61.2% 63.4% 36.2% 28.4% 5.0 3.9
Viet Credit 36.6% 31.3% 3.2% 4.2% 0.7% 0.9% 4.8% 7.2% 13.3% 11.1% 54.3% 54.8% 41.5% 40.0% 6.9 7.9
JACCS 24.9% 21.1% 3.7% 10.7% 0.8% 2.3% 2.7% 8.3% 10.9% 7.2% 34.5% 26.5% 60.9% 60.1% 2.2 3.0
Sector average 21.5% 22.1% 7.2% 9.8% 1.4% 2.0% 7.3% 11% 9.6% 9.1% 55.5% 51.4% 35.5% 35.8% 4.4 4.5
Note: These top 10 FinCos accounted for 97.8% of market share in 1H2021.
The loans we used to calculate NIM include both CF loans and institutional loans as some FinCos listed above (EVN Finance and Viet Credit) are general-licensed FinCos.
The TOI we used includes Other income.
30
LIQUDITY & FUNDING
Vietnamese financial system is facing a liquidity crunch on most of funding channels

Market I Market II (interbank market
Figure 24: YTD credit growth vs customer deposit growth by years Figure 25: Vietnam Interbank rate Overnight tenure vs FED Fund rate
14% VNIBOR ON FED Fund rate
6%
11% 10.47%
The escalation of USD in the international market
7.88%
8% 4%
5%
5.29% 4.04% 2%
2%
Sep-17 Sep-18 Sep-19 Sep-20 Sep-21 Sep-22
YTD Credit growth YTD Deposit growth 0%
Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22
Source: FiinResearch from SBV. Market I means the market where credit institutions raised funds from public (individuals and corporates). Market II means the interbank market where credit
institutions raise funds from each other
Figure 26: Policy rates
• Like commercial banks and other credit institutions, FinCos have to raise funds
from the public, other credit institutions and various external sources to 6%
finance their lending activities. In the past two years, FinCos enjoyed a low SBV raised policy rates
deposit interest rate environment, hence was easily able to maintain interest to curb VND depreciation
margins even during the pandemic. However, under the current context of the 4%
financial system, where liquidity crunch has persisted for months, FinCos are
facing a burden of rising cost of funding which will eventually affect their
earnings. 2%
Jan-22 Mar-22 May-22 Jul-22 Sep-22
• In market I, for the first time in many years, Credit growth outstripped the OMO Buying rate Refinance rate Re-discount rate
growth of customer deposit growth by 2.6 times for the fact that credit
institutions accelerated lending to capture huge demand since business Source: FiinResearch from SBV. OMO means open market operations.
operations and consumer spending has recovered. Meanwhile, customer
At the same time, SBV has intervened to control VND liquidity to stabilize
deposits remained stagnant due to transitions in the investment behaviour of
foreign exchange rates. Elevated inflation in the US caused VND and many
customers after Covid-19, shifting their savings to riskier asset classes with
other currencies to weaken versus USD. SBV has raised policy rates as one of
higher returns (stock, real estates, etc., ) when deposit interest rates in early
the monetary tools to hamper VND depreciation, resulting in high borrowing
2022 lingered relatively low over the past 2 years. This heightened the
costs in the interbank market. In other words, cost of funds will be higher
pressure on fund raising, leading to the race for deposit rate hike among credit
for banks and FinCos as they have to raise deposit rates to attract funds for
institutions, triggering concern about the liquidity of the financial system.
facilitating high credit demand in the time to come.
31
LIQUDITY & FUNDING
FinCos are facing increasing costs of funding, threatening net interest margin in the time to
come
Figure : Changes in external funding mix of active FinCos Figure 28: Total value of corporate bonds
issued by FinCos in 9M2022 (VNDbn)
1H2022 3,000
6.1% 2,400
2.0% 51.5% 13.5%
2021 1.2%
4.6% 11.4% 2,000
33.0% 1,400
51.5% 48.5% 1,100
45.3% 48.5% 52.7%
52.7% 47.3% 1,000
52.7% 47.3%
62.4%
87.4%
80.5%
0
FE Credit Mcredit Home
Customer deposits Valuable papers Borrowing from other financial institutions and other liabilities
Credit
• So far, deposit interest rates for 12-month tenure above 8%/year have appeared in
many private commercial banks. Moreover, unlike commercial banks, FinCos are not
allowed to raise deposits from individuals, pushing them to borrow from other Figure: Overnight interbank rate and 12M deposit rates of JOCBs
sources such as corporate deposits, the interbank market, and valuable papers (CDs
and C-bonds) besides funding from their parent groups. 10% Liquidity crunch 6.5%
• In the past six months, FinCos actively raised funds from the interbank market to
8%
enjoy the low-interest rate environment. However, SBV has embarked on OMO by
issuing T-bills and selling USD to defend the VND. As a result, the interbank rate 6.0%
climbed to a 10-year record high, which triggered further challenges for FinCos to 6%
raise funds.
• FinCos turned to bond issuance as a channel for fundraising. FE Credit was the top 4%
5.5%
bond issuer among FinCos, with VND2,400bn worth of corporate bonds issued in
9M2022, followed by Mcredit with VND1,400bn. Home Credit also joined the race in 2%
August, and within two months, the company had issued a total of VND1,100bn worth
of corporate bonds with tenure ranging from 18 to 24 months. Unlike its two peers, 0% 5.0%
Home Credit does not have support from a parent bank in Vietnam; as such, the Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22
company have less access to a wide range of customers as well as receiving low-cost
funds.
VNIBOR ON (LHS) Deposits rate of JOCBs_12M tenure(RHS)
• Thus, FinCos are facing the burden of interest expense, yet those having low-cost
funding from their parent banks will have competitive advantages over the others.
Source: FiinResearch from FiinPro and banks’ website
32
EARNINGS QUALITY
Sector NIM slightly recovered given lending interest rate rebounds and improved cost of fund
Figure 29: FinCos’ average Net interest income (NIM), 2018 – 1H2022 Figure 30: NIM of Top 10 FinCos, 2021 vs. 1H2022
29.8%
31.3%
26.6% Viet Credit
25.9% 36.6%
24.4%
21.5% 22.1%
30.3%
HD Saison
28.1%
2017 2018 2019 2020 2021 1H2022
29.5%
Source: FiinResearch. Average NIM of 14 active FinCos in 1H2022 is annualized. Mcredit
25.6%
Net interest margin (NIM = Net interest income/Average loans).
• Sector average NIM of active FinCos slightly reverted in response to the improvement of interest 29.2%
income growth in the proportion of loan growth, especially from some players such as Home Home Credit
25.1%
Credit, Mcredit and HD Saison.
• Robust growth of interest income of Cash Loan (which holds the largest proportion of FinCos’ 28.8%
SHB Finance
loan portfolio and has the highest interest margin) was the main growth driver. Additionally, 27.4%
Credit card segment, despite its small portion in the loan book of major FinCos, posted an
exceptional growth in 1H2022 (YTD), which also counts to the rise in NIM of these FinCos. 27.3% 1H2022
Mirae Asset
28.1% 2021
• Lending interest rates tend to rise recently as FinCos were less pressured to reduce the interest
rate as oriented by SBV to support customers hit by COVID-19. In particular, Mcredit twice
announced an increase of 1-8ppt for some Cash Loan products in January and March 2022. 25.1%
Shinhan Finance
25.5%
• Moreover, FinCos made efforts to optimize the cost of funding (COF) by diversifying funding
costs ( such as borrowings from the interbank market when interest rates were low, getting low- 21.1%
cost shareholder loans, etc.) to preserve interest margin. FE Credit continuously managed to JACCS
24.9%
reduce the average cost of funds by more than 100 percentage points in the past 12 months
(from 7.1% by the end of 2021 and 6.1% by the end of June 2022). HD Saison’s COF also sharply
20.6%
declined (from 5.9% by the end of 2021 to 5.2% by the end of June 2022). However, Fincos are FE Credit
facing rising funding cost due to a liquidity shortage in the banking system as addressed earlier, 21.1%
which might negatively impact on interest margin from the second half of the year.
Toyota Financial 5.9%
• For the performance of individual FinCos, Viet Credit topped the ranking for NIM thanks to the Services 6.3%
strong growth of its cash card loan balance; however, the figure does not fully reflect its
earnings quality as its asset quality faced deterioration given sharply rising NPLs. HD Saison and
Sector avg. = 22.1%
Mcredit saw a remarkable improvement in NIM thanks to their competitive advantage of low cost (1H2022)
funding supported by their parent groups.
33
ASSET QUALITY
As the pandemic and its effects continued to cascade through 2022, FinCos' customer
portfolio of subprime borrowers would take longer to recuperate
Figure 32: FinCos’ average non-performing loans (NPL), 2017 - 1H2022 Figure 33: NPL ratios of Top 10 FinCos, 2021 vs. 1H2022
NPL Ratios Non-performing-loan Loan loss coverage
9.6% growth, 1H2022 YTD ratio, 1H2022
9.1%
15.6%
5.5% FE Credit 10.3% 59.2%
5.2% 4.9% 14.1%
11.1%
Viet Credit 11.2% 55.5%
2018 2019 2020 2021 1H2022 13.3%
Source: FiinResearch. Average NPL of 14 active FinCos in 1H2022. 10.9%
SHB Finance 10.7% 55.6%
• FE Credit recorded NPL hiked at 15.6% in 1H2022 due to the deterioration of the 10.8%
customer portfolio acquired in the pandemic. Accordingly, during the pandemic FE
Credit determined to restrict Cash Loans to NTB customers. Instead, the Company 7.6%
promoted 2WL and CDL segments so that they could cross-sell Cash Loans to the Shinhan Finance -26.2% 49.4%
11.4%
customers acquired during from these channels, which are supposedly qualified after
a certain observation period; unfortunately, those customers suffered from reduced 7.2%
income recently and struggled with the monthly repayment. Weakened asset quality JACCS -11.0% 57.0%
also deferred FE Credit from cross-selling Cash Loans and Credit Cards in the first half
10.9%
over the concern of rising NPLs. Recording the issue, the Company embarked on its
“selective credit growth” plan, starting from the VND10trn program package to
7.0%
HD Saison 12.4% 63.5%
workers in which customers will be classified with suitable credit limits and interest 7.3%
rates; (2) debt reminding and collection will be supported by Viet Nam General
Confederation of Labour. 6.9% 1H2022
Mirae Asset 9.1% 55.5%
• VietCredit took some action to help reduce its NPL ratio. Notably, the Company has 7.0% 2021
reduced credit card minimum payment from 1.5% of outstanding balance to 0.75%
since Jul 2021, reducing the probability of a loan becoming overdue. 6.5%
Mcredit 35.3% 72.3%
• Home Credit maintained a healthy asset quality throughout the pandemic. Its NPL
6.2%
ratio turned back to the pre-covid level, and the overdue amount (categories 2-5)
followed a downward trend. Standardization of debt reminder and collection
2.5%
Home Credit -42.6% 84.0%
procedures following standard MiFID (Markets in Financial Instruments Directive) was 4.7%
attributed to support customers to pay on schedule.
Toyota Financial 2.3%
• Mcredit managed to keep NPL ratio relatively stable. Growth coupled with effective -25.8% 81.5%
risk management thanks to the classification of customer profiles right from the start
Services 3.5%
through big data analysis helps Mcredit maintain a moderate NPL ratio. Sector avg. = 9.1%
(1H2022)
Source: FiinResearch. 34
EFFICIENCY
FinCos continue cost-cutting through speeding up digital transformation as the post-

pandemic recovery remains uneven
Figure 34: FinCos’ average Cost to income (CIR), 2017 – 1H2022 Figure 35: CIR of top 10 FinCos, 2021 vs. 1H2022
CIR OPEX as % of TOI, 1H2022
39.1%
37.1% 37.2%
35.8% 60.1% 60% 27% 15%
35.5% JACCS
60.9%
40.5% 41% 37% 22%

Home Credit
49.1%
2018 2019 2020 2021 1H2022
Source: FiinResearch. Average CIR of 14 active FinCos in 1H2022. 40.0% 40% 55% 5%
Cost to income ratio (CIR = Operating expense (OPEX)/TOI). Viet Credit
41.5%
• Sector CIR slightly inched up from the YE 2021 as FinCos promoted services point
activities at retail partners and collection after scaling down operations during Covid 38.1%
HD Saison 38% 40% 22%
period. Digitalization continued to be the focus to optimize OPEX as customers 44.0%
increasingly raised their embracement of digital technology, pressuring the race to level
up customer experience.
34.5%
• Home Credit ramped up the digital sales, targeting to the "one-stop shop“ business Mirae Asset 33% 62% 4%
28.4%
model. The HC mobile app offers all credit products, training customer credit behaviour
and gradually enhancing credit history to upgrade to more advanced products. The
33.5%
voicebot system (automatic consultation) serving 24/7 is considered an effective support FE Credit 34% 57% 8%
tool to help improve work efficiency 28.5%
• Mcredit made use of technological and customer-enriching support from the parent bank
30.4%
and MB Group ecosystem to reduce 27% of appraisal cost, 40% of the administration cost Mcredit 30% 48% 21%
and automated 15% amounts of internal procedures. These achievements were derived 34.1%
from the innovation of Core banking system, Data lake on Cloud, Call bots, Digital Office,
Multi-factor Authentication, etc. 28.4%
SHB Finance 28% 63% 8%
• FE Credit’s CIR increased in 1H2022, mainly driven by the contraction of operating 36.2%
income. Promotion of digitalized procedures and multi-tasking sales model at POS
continued to help FE Credit lower personnel costs. The coming cooperation with General 27.6%
Shinhan Finance 28% 60% 12%
Confederation of Labour and Trusting Social is expected to contribute to cutting down on 30.6%
administration and collection costs.
• JACCs remained the highest CIR as 2022 was positioned to prepare for a new phase of 24.6%
Toyota Financial Services 25% 18% 58%
growth, addressing issues that have manifested during the pandemic, including 21.8%
reinforcing platform for growth.
1H2022 2021
Opex Provision PBT
Sector avg. = 35.8% 35
(1H2022)
PROFITABILITY
Net profit margin of FinCos bounced back driven by narrowed loan loss provision
Figure 36: FinCos’ average Net Profit Margin (NPM) & LLP/TOI, Figure 37: NPM of Top 10 FinCos, 2021 vs. 1H2022
2017 – 1H2022
LLP as a % of Net operating income
NPM LLP/TOI 55.5%
NPM before provision and tax
51.4%
45.5% 46.0% 23.7%
39.4%
Toyota Financial Services
36.9% 38.3% 38.5%
31.6%
17.8% 63.9%
20.7% HD Saison
17.2% 17.1%
25.0% 13.8% 61.9%
9.8%
7.2%
16.9% 69.7%
Mcredit
13.8% 73.8%
2017 2018 2019 2020 2021 1H2022
Source: FiinResearch. Average ratios of 14 active FinCos in 1H2022. 16.0% 65.4%
Net Profit Margin (NPM) = PAT/Total operating income (TOI includes other income).
Home Credit
10.0% 75.2%
LLP/TOI = Loan Loss Provision (expense)/Total operating income.
• After bottoming out in 2021, sector NPM rebounded to 9.8% in response to 10.7%
JACCS 66.6%
robust interest income growth and narrowed loan loss provision thanks to 3.7% 88.1%
the recovered repayment capacity of borrowers.
• Toyota Financial Service topped the table in terms of NPM thanks to its 9.5% 83.5%
Shinhan Finance
stable net profit growth backed by its secured loan business. 12.6% 77.2%
• Facing high pressure on interest spread, major Fincos have promoted non-
6.9% 88.6%
interest income sources such as insurance commissions and service fees. SHB Finance
Remarkably, Home Credit, utilizing POS for CDLs and VLs, offers a wide 2.0% 96.0%
range of life and non-life insurance products (mobile phones, furniture, 1H2022
6.5% 87.5%
motorbikes) with small fees. FE Credit and Mcredit also enriched income Mirae Asset
4.9% 2021 91.4%
from health insurance and 2W vehicle insurance.
• However, provision cost still plays a decisive role in the profitability 4.2% 91.3%
picture of FinCos. FE Credit and Viet Credit expanded their provision for Viet Credit
3.2% 92.7%
non-performing loans, which took a profound toll on their bottom line. On
the other hand, HD Saison, MCredit, Home Credit and JACCs have reduced 2.6% 94.3%
the pressure of provisioning in 1H2022 as impacted customers have FE Credit
1.9% 96.6%
recovered their payment capacity.
Sector avg. = 9.8%
(1H2022)
36
PROFITABILITY
ROAA and ROAE recovered considerably in most Fincos given improved operating efficiency
and softer provision
Figure 38: FinCos’ average ROAA and ROAE, 2017 - 1H2022 Figure 39: ROAA & ROAE of Top 10 FinCos, 2021 vs. 1H2022
24.0% ROAA ROAE ROAA ROAE

20.0% 6.3% 24.7%
HD Saison
5.3% 23.1%
15.2%
11.0% 4.5% 45.3%
Mcredit
7.3% 3.0% 28.8%
4.8% 3.9% 2.9% 2.0% 4.4% 21.4%
1.4% Home Credit
2.2% 11.2%
2018 2019 2020 2021 1H2022 Toyota Financial 2.5% 14.7%
Source: FiinResearch.Return on average asset (ROAA = PAT/Average asset).Return on average equity Services 2.1% 13.4%
(ROAE = PAT/Average equity).
• Sector ROAA and ROAE thanks to the recovery of profit after tax in most FinCos. Some 2.0% 1H2022 7.4% 1H2022
Shinhan Finance
FinCos recorded a significant increase in ROE such as HD Saisosn, Mcredit, Home 2.7% 2021 9.4% 2021
credit, thanks to recovered profit.
• HD Saison topped the table in terms of return on assets thanks to strong recovered of 1.8% 9.9%
SHB Finance
net interest income driven by Cash Loan growth. Compared to other FinCos, HD Saison 0.5% 2.4%
has a more balance portfolio and had no pressure to reduce regulatory Cash Loan
proportion (39.4% in 1H2022, much lower than the threshold of 60%), hence have more 1.7% 11.2%
Mirae Asset
room to accelerate this high-margin product for a while. 1.3% 9.2%
• Mcredit recorded 62% interest income growth compared to the same period last year.
The Company also posted VND791bn of fee income, including 587bn came from 1.1% 4.1%
JACCS
bancassurance, bringing its profit before tax to reach VNd600bn, up 74% YoY. Mcredit 0.8% 2.7%
also receives low-cost funding from the two parent banks accounting for over 64% of
the company's total operating capital. The capital sources from the two parent groups 0.9% 7.2%
MB Bank and Shinsei Bank (via USD revolving credit packages) mainly have short terms
Viet Credit
0.7% 4.8%
(under one year), with competitive interest rates with a commitment to 100%
turnaround, which helps ease liquidity pressure for the company in medium term. 0.6% 2.8%
FE Credit
• Despite companies' efforts to optimize operating costs, acceleration in provisioning 0.4% 2.0%
and the burden of the rising cost of funds is expected to cause significant uncertainty
over profitability in the time to come. Sector avg. = 2.0% Sector avg. = 11.0%
(1H2022) (1H2022)
Source: FiinResearch. 37
Contents
Section 3: Key themes in the consumer finance sector
Page
3.1 Product trend | Buy now pay later 38-40
3.2 Potential competition from alternative lenders 41-44
3.3 Updates on M&A activities 45-46
38
3.1. Buy now pay later (BNPL) model and its disruptions in the consumer finance market
Buy now, pay later is poised to thrive as a new customer acquisition & retention channel
What is BNPL and How does it work? Typical payment schedules with BNPL
BNPL is a short-term financing option which allows customers to purchase products and pay for them in the
future - at zero or low interest. No upfront required and pay in full at the
PAY LATER
4 key stakeholders of BNPL business models end of month/a pre-determined period
Typically 4 equal biweekly payments

PAY-IN-4
1 upfront payment + 3 biweekly payments
Customers BNPL Providers Merchants Facilitators

PAY-IN-3 Typically equal monthly payments
Large retail chains, Renowned e- AND OTHER 1 upfront payment + monthly payments
e-commerce sites wallets/mobile
End users of Fintech, Bank money providers
BNPL service and FinCos Business opportunities for CF players
• For FinCos, BNPL is expected to become a new customer
acquisition & customer retention channel to cross-sell other
Customer journey with BNPL service products and create an opportunity to digitalize their
traditional lending products.
Shopping Select
Select other Purchase • Competing with Fintech in BNPL, FinCos have an advantage
“BNPL” at Transaction
at payment of an existing healthy and strong customer base, technology,
the checkout Completed confirmed
merchant option
page digitalization, multiple channels of interaction and existing
relationships with retail organizations that help optimize
NO customer journey and customer appraisal experience, results
in better customer portfolio
Sign up/in Credit Risk YES • In the future, customers will be granted a limit or credit
Transaction
account Assessment registered card for shopping on demand and pay by installments
instead of generating one off loan contracts.
Pending Approval Key risks to be considered and measures for mitigation
• BNPL gives consumers a feeling of deferring payment (rather than being in debt) and the power to • Controlling overspending customer, leading to credit loss
easily try-out a product without incurring financial cost at the time of purchase. • High costs to grow platform and infrastructure
• For merchants and consumers, BNPL is expected to become a preferred payment option in the future. • In order to mitigate risk, FinCos need to build a strong
• BNPL will enjoy huge growth potentials, fostered by Vietnam's huge e-commerce market, favorable customer database and customer analytic platforms,
demographic factors (golden population, a young and tech-savvy generation, cashless payment trend). troubleshoot mechanisms to improve KYC, design credit
limits by customer portraits to mitigate risk from the
beginning and monitoring the debt repayment efficiently.
39
BNPL models
3.1. Buy now pay later (BNPL) model and its disruptions in the consumer finance market
Diversification in practiced BNPL models indulge both Fintech and traditional CF lenders
Three typical business models of BNPL practiced in Vietnam
1. Direct providers: BNPL as a financing service directly offered by fintech players

• Direct providers offer point-of-sale BNPL services as the merchant's end-sale point, whose risk is
borne by the fintech companies that cater the service
• To avoid regulatory risk, in this model fintech BNPL providers introduce themselves as middlemen
who distribute the so-called "BNPL vouchers” of the merchants to customers which help customers
order now and pay later.
• However, this model might be capped by regulators as the cashflow is by nature credit flows, which
trigger credit risk, especially in case a great numbers of customers failed to pay back debt
2. BNPL platforms operated by Fintech but funded by banks/FinCos

• These BNPL providers acts as connectors who work with direct providers to establish merchant relationships, at
the same time collaborate with banks/FinCos to finance the customer’s purchase, then offer consumers BNPL as a
simple financial payment option for their purchases.
• This model has some advantages over the first model to the aspect that the fintech company is the one operate
the BNPL platform, control the customer journey while the financiers are licensed credit institutions i.e., banks
and FinCos. This type of partnership between fintech and traditional lenders is encouraged by regulators.
3. BNPL as a credit line self-operated by Banks & FinCos

• Banks & FinCos themselves developed and operate BNPL model, acting like a credit card for web and mobile wallets, mostly
offer 0% interest schemes for a predetermined duration. Customers using BNPL and showing good credit history will be
upgraded to have virtual Credit Cards later and, finally, physical Credit Cards (with a higher monthly credit limit.
• Home Credit invested VND200bn in developing BNPL products under its strategic partner with Tiki a leading e-commerce in
Vietnam. Under the current model, customers opt to pay in 1, 3, 6 or 12 months, and enjoy interest rates from 0%.
• Before that, FE Credit entered a partnership with Viettel Money to deliver BNPL as a payment option for Viettel Money’s
customers to pay for bills, express services, shopping in linked e-commerce platforms. The Company plans to expand its
merchant networks in the future.
• Mirae Asset develop its BNPL products as a virtual credit line called Mirae Asset Credit that allows their customers to
spending within the limit at its merchant partners (FPTshop, Nguyen Kim, etc., )
40
Page
3.1. Product trend | Buy now pay later 38-40
3.2. Competition from alternative lenders 41-44
3.3. Updates on M&A activities 45-46
41
3.2. Pawnshop model and its impact on the mainstream consumer finance segment
Pawnshops' activities flourished posing fierce competition to mainstream CF providers
KEY PLAYERS BUSINESS MODEL
Year of Number of Loan Book ❖ Legal status: Operating under a certificate of business registration of a
Establishment Store (VNDbn) city or provincial Department of Planning and Investment.
❖ Key products:
➢Secured loans including:
F88 2013 525 1,682.5 • Motorbike title loans
• Car title loans
Srisawad 2015 102 143.4 • Other secured loans using motorbike, car or other
personal items (i.e., mobile phone, laptop, tablet,
camera, jewelry, etc.,) as collateral for the loans.
T99 2020 65 114.7 ➢Insurance (i.e., distribution of non-life insurance products via
Nguoibanvang their network of nationwide stores and retail customer base).
2017 29 82 ❖ Target customers: The same customer segment as FinCos but offering
much simpler loan procedures. They target customers with demand for
small ticket-sized loans, not qualified for loan applications, and/or not
Vietmoney 2016 37 23.8
served by commercial banks and FinCos as long as they have collateral
to secure for the loan.
Dongshopsun 2012 21 196.4 ❖ Sources of income: interest income, income from disposal of
repossessed assets, and bancassurance fee income.
Source: FiinRatings’s credit rating announcement, as of FY 2021
❖ Network: Mainly relying on physical store network nationwide.
Key risks/challenges to mainstream CF providers
Competition when cultivating the same customer segments:

✓ Pawnshops with simple procedures can easily attract customers while FinCos must comply with regulations on credit institutions including reporting and checking credit
history with CIC before and after loan approval. The proliferation of hot loans from pawnshops and alternative lenders (P2P lending, Payday lending) during the pandemic
when subprime customers struggle in accessing credit at banks and FinCos made an example for the situation.
✓ FinCos are limited by credit growth quota and prudential ratios (CAR, LDR, etc., )
Credit risk: Pawnshops are not regulated by SBV, hence information about the delinquencies of their customers is not reported to CIC. Thus, FinCos face credit risks as they
might not be aware of the cases in that
✓ Customers might apply for loans from FinCos to cover another loan from pawnshops, later they might not be able to pay back debt to FinCos or
✓ They simply have loans in both types of lenders within a period, but prioritize repayment to pawnshops and lenders in the black market
42
3.2. Potential competition from alternative lenders
F88 has quickly transformed its business model from a solely pawnshop to a "convenient
store" serving comprehensive financial services
1 COMPANY PROFILE 3 KEY PRODUCT OFFERINGS
❖ Ownership structure: F88 Investment JSC (99.99%), Phung Anh ❖ Secured loans:
Tuan (0.005%), Ngo Quang Hung (0.005%). Ticket size: maximum VND2bn
➢ Mekong Capital and Granite Oak have exposure to F88 Tenor: 3 – 12 months
through their investments in F88 Investment JSC. Disbursement period: 15-10 minutes
❖ Network: 700+ transaction offices by Aug, 2022, chợ đồ cũ ➢ Motorbike title loans
thanh lý ➢ Car title loans
➢ Other secured loans using motorbike, car or
other personal items (i.e., mobile phone,
2 BUSINESS MODEL laptop, tablet, camera, jewelry, etc.,) as
collateral for the loans.
❖ Target customers: Customers with demand for small ticket ❖ Bancassurance (i.e., distribution of non-
sized loans, not qualified for loan applications and/or not life insurance products incl. Personal
served by commercial banks and other non-bank financial Accident Insurance, Vehicle Insurance,
institutions (i.e., finance companies) etc. via their network)
❖ Sources of income: interest income, income from disposal of ❖ New products:

repossessed assets, bancassurance fee income, other fee ➢ Bill payment (utility, internet, telecom)
income. ➢ E-wallets and Mobile money deposit and
withdrawal
❖ Network: Mainly relying on physical store network ➢ VETC account deposit
nationwide. F88 also owns a platform for used motorbikes to
enhance liquidity for collateral. Breakdown F88 secured loans by products, 3M2022
4%
Motobike title
37% Car title
59%
Other products
43
Section 3: Key themes in the consumer finance sector3.2. Pawnshop model and its impact on the mainstream
consumer finance segment
F88 posed potential competition to FinCos given the aggressive expansion to provide Cash
Loans at its retail partners
4 HIGHLIGHTS ON FINANCIAL PERFORMANCE 5 RECENT DEVELOPMENTS
Loan Book of F88 and its Number of store NIM of F88 compared to pawnshop F88 has quickly transformed its business model from a
chain and FinCos solely pawnshop to a "convenient store" serving
comprehensive financial services, competing with FinCos
Loan Book (VNDbn) 2000
Number of Store 1682.5 77.4% ❖ Aug 2022: Launched VETC account deposit service and
62.1% “Bao hiem tien le” product. Customers who purchase this
57.4%
insurance only need to pay a minimum of VND500 p.a. to
1,053
47.4%
earn payouts of up to VND1mn in case of accidents.
50.7% 49.8%
589 48.1%
525 22.1% 25.1%
20.5% 39.7% ❖ Jun 2022: CIMB and F88 cooperated to
415 304
124 19.2% deploy consumer loan products with
40 46
157
91 1.2% 0.8% suitable interest rates and simple
procedures to low-income individuals.
2017 2018 2019 2020 2021 3M2022 2018 2019 2020 2021 3M2022
0.0%
❖ Dec 2021: Partnered with MWG to
allow borrowers to visit MWG’s
F88 Thegioididong and Dien May Xanh
Average of pawnshop chain stores to apply for Cash Loans using
Average of FinCos an ID/authentic vehicle registration
Non-performing Loan Ratio
certificate with a credit limit of up
3.7% to VND20mn.
2.0% 2.2%
1.7%
0.9% 0.9% 1.2%
0.8% 0.5% 0.5% 0.6% 0.8% F88 plans to boost its countrywide coverage to 800
outlets by the end of 2022, and 1000 outlets by
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q1 2023; and continues to collaborate with merchants
such as retailers and technology companies.
2019 2020 2021 2022
Source: FiinRatings’ credit rating announcement
44
Contents
Page
3.1 Product trend | Buy now pay later 38-40
3.2 Competition from alternative lenders 41-44
3.3 Update of M&A activities 45-46
45
3.3. Update of M&A activities
M&A activities may heat up again with potential targets
Maritime Bank continues its divestment plan from FCCOM

22.8
NPL ratio
• In March 2022, MSB approved 100% divestment resolution in FCCOM. The bank revealed VNDbn
787 % 10.5%
two options for the expected deal: 760
• To transfer a part of its capital at FCCOM for long-term cooperation with a
608 611
strategic partner
500 513
• To transfer 100% of its contributed capital at FCCOM
• In 2021, MSB worked with a Japanese partner in the first phase, the deal value was over 358 393
VND2,000bn. However, due to the pandemic, FCCOM incurred high NPL levels, so the
Japanese partner reconsidered. Recently the asset quality of the Company has improved
substantially and MSB is in contact with two foreign partners negotiating the same
expected deal value. The M&A is expected to be conclude in 2022 upon approval of SBV
2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022

Equity Capital Charter Capital Total Assets Customer Loans
HAFIC is awaiting PM’s approval for its merger into TPBank

• Handico Finance Joint Stock Company (HAFIC), a weak financial company with negative
equity capital under special control by SBV since 2014. The Company is 12.7% owned by NPL ratio
550 550
HAFIC, 87.3% owned by other non-state shareholders, limiting shareholders from 480 482 100% 100%
transferring share without approval from the State.
• The deal also attracted Aeon Financial Services or AFS (Japan) hay KB Kookmin Card 22 21
(Korea), however due to the complex nature of state ownership, it was still incomplete.
2021 1H2022 2021 1H2022 2021 1H2022 2021 1H2022
• In 2021, with local expertise and experience in resolving NPL problems, TPBank has Equity Capital Charter Capital Total Assets Customer
been preferred by SBV to participate in the restructuring HAFIC. This project has been Loans
approved by the SBV's Special Supervisory Board and is currently completing the
procedures to submit to the Prime Minister for consideration and approval. -741 -779
46
Contents
Section 4: Key regulatory changes
47
Section 4: Key regulatory changes
Approval of lending on digital platforms would help speed up digital transformation
Content Key focus Impact to FinCos Reference
FinCos must have a plan to build and manage eKYC process

(including collection, checking, comparing to ensure the
matching between customer identification information,
Approved lending Create a legal framework for lending on
customer biometric data and the corresponding biometric
transactions via electronic platforms, pave the way for Article 24a
information and other factors on the original personal
electrical means digitalizing lending procedures in banks and
identification documents (or those authenticated by the
FinCos
competent state agency) ; control e-lending procedures and
risk assessment to prevent fraud and take measures to contrast
and store data/information.
Traditional lending or lending via electronic Clause 1

Loan Agreement e-contracts must follow the same minimum requirements as
channels, the loan agreement must still Article 23
written contracts
contain the specified minimum contents.
• Provide a clear definition between one-

shot loan and credit line loan
Revising the wording to differentiate on-shot loan and credit • FinCos can disburse upon the quest for
line loan to avoid misunderstanding disbursement from customers within the
• Previously, Decree No 39/2016 stated “Credit line loan: The agreed limit instead of performing
credit institution determines and agrees with its customer procedures of on-shot loans
on the maximum outstanding amount of debt maintained • FinCos can renovate the current Cash
during a specified time period. Within a credit line, the Loan product to covert on-shot Cash Loan Clause 4, 5
Credit line loan
credit institution will perform one-shot loans. At least to credit line to capture regular demand Article 27
once a year, the credit institution will consider redefining of customers, enhance customer
the maximum outstanding amount of debt and duration of experience and engagement, grow loan
maintenance thereof balance, hence increase recurring revenue
• The amendments shall remove the sentence “Within a from existing customers)
credit line, the credit institution will perform one-shot • Performing credit line Cash Loan via
loans” digital platforms can help boost loan
growth
48
Contents
Section 5: Appendices
Page
5.1 Macro-economic updates 49-54
1.2 Key figures of the banking system 55-57
49
5.1. Macro-economic updates
Vietnam in numbers…
US$286.69bn 8.83% 3.82%
GDP GDP growth Inflation

9M2022 9M2022 9M2022
37.12% 73.2% 78.1%
Hoang Sa
Urban population Internet adoption Social media users

2021 Jan Jan
2022 2022
US$6.52bn US$20.67bn ~68%
Truong Sa
Trade Surplus Retail sales Adult account owners

9M 2022 9M2022 2021
50
Economic growth
Vietnam’s economy is recovering strongly in 2022 on a low base of 2021

Figure 40: Vietnam’s GDP growth Figure 41: Vietnam’s GDP growth
60
53.7 54.3 54.7 54
52.1 52.2 52.5 51.7 51.7 52.7 52.5
8.8% 51.2
7.0% 7.2% 50
6.4% 6.0%
5.0% strongly bounced back since last October
40.2
2.91% as the economy is reopened
2.6% 40
30
2019 2020 2021 1Q2022 1H2022 9M2022 2022E 2023E
Aug-22
Mar-22
Oct-21
Nov-21
Dec-21
Feb-22
Sep-21
Apr-22
Jun-22
Jul-22
May-22
Sep-22
Jan-22
Total GDP (VNDtrn) YoY Growth
Source: FiinResearch from GSO. Note: the forecast is the Government’s target for 2022 Source: FiinResearch from IHS Markit
Figure 42: Vietnam trade balance as of September 2022
Trade surplus of US$6.52bn in 9M2022, +15% YoY
31.9 34.6 34.7 33.3 32.8 34.92 33.38
28.9 30.8 30.9 30.61
27.0 23.4 3.86
2.7 3.0
2.0 2.42
1.3 1.4
0.8 0.6
0.4 0.07
2.0 1.7
26.7 26.1 25.4

30.6 31.6 29.4 32.7 32.5 32.6 32.2 30.53 31.06 30.96
Dec-21
May-22
Sep-21
Mar-22
Jun-22
Jul-22
Sep-22
Nov-21
Aug-22
Jan-22
Feb-22
Apr-22
Oct-21
Source: FiinResearch from Customs Office of Vietnam Import Export Trade Surplus (Deficit)
51
Inflation risk
While inflation was well managed given eased spike in commodity price and Government’s
control efforts….
Figure 43: Vietnam CPI and core inflation (YoY), %
Vietnam CPI is expected to be maintained under target (4%) 4.00
3.53 3.54
3.23
2.79 2.73
2.31
2.01 1.88
1.84
1.41 1.48
0.81
2017 2018 2019 2020 2021 9M2022 2022e

CPI(%) Core inflation(%)
Source: FiinResearch from GSO. Note: the forecast is the Government’s target for 2022
Figure 44: Global commodity market price
160
100
120
Price Index
($/bbl)
60
80
40 20
T1 T2 T3 T4 T5 T6 T7 T8 T9 T10 T11 T12 T1 T2 T3 T4 T5 T6 T7 T8 T9 T10 T11 T12 T1 T2 T3 T4 T5 T6 T7 T8
2020 2021 2022
Precious Metals (LHS) Agriculture (LHS) Metals & Minerals (LHS) Brent oil ($/bbl) (RHS)
Source: FiinResearch from WorldBank
Financial Information • Business Information • Market Research • Credit Rating 52

RETAILS & TOURISM SALES
Tourism activities remained to weaken in September due to the low season after summer
vacation
Figure 45: Revenue of retails, VNDtrn & MoM Growth Figure 46: Revenue of tourism, VNDtrn & MoM Growth
Revenue of retails (VNDtrn) M-o-M growth Revenue of tourism industry (VNDtrn) M-o-M growth
331.7%
20.2%
12.2%
87.2%
4.1% 47.9% 59.2% 44.4% 37.5% 38.0%
2.9% 2.9% 4.8% 4.4% -4.4% 22.7% -2.8% -8.2%
-0.1% 0.9% 1.3% 0.0% 0.8% 0.7%
2.6%
-7.3%
266 320 359 358 369 342 356 366 369 374 374 377 379 0.10 0.41 0.61 0.97 1.01 1.06 1.01 1.24 1.79 2.46 3.40 3.30 3.03
Source: FiinResearch from GSO. Source: FiinResearch from GSO.
• Retail revenue in 9M2022 recorded a growth of 15.8% YoY, reaching • Revenue generated from tourism contributed VND18.3trn in the first nine
VND3,300trn. However, the increase was mainly driven by growing from months of 2022, a 3.9-fold rise YoY due to the strong recovery of tourism
the low base in 2021 and price anchoring at a high level, if excluding the activities, especially domestic tourism. Some localities recorded a high
price factor, retail sales only increased by 11.6%. Some groups of increase in tourism revenue in September, including Can Tho (+766.8%), Da
products recorded strong increase in revenue including cultural and Nang (+634.7%), Hanoi (+386.3%), Hai Phong (+277.0%), HCMC (+151.9%).
educational products (+25.9%), garment (+16.6%), means of transport However, tourism has not yet recovered to the pre-COVID level, with total
(except for cars) (+15.3%), food and foodstuffs (+11.4%), household revenue of 9M2022 only equivalent to 55.9% of the same period in 2019.
appliances, tools and equipment (+6.9%). Notably, revenue from tourism tended to slow down from August as the
summer vacation of students approached its end.
53
Foreign Reserves & FX
…exchange rate pressure is heightening, forcing SBV to steadily sell USD to stabilize VND
value
Figure 47: Exchange rate of VND and selected currencies compared to USD
5% VND depreciating recently
by 2-3%
0%
-5%
-10%
-15%
-20%
Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22
VND-USD THB-USD SGD-USD PHP-USD JPY-USD USD-EUR
Source: FiinResearch from countries’ central banks
Figure 48: Vietnam foreign reserves (US$bn) Net sell from SBV’s reserves in 6M2022: US$8.6bn
4.3
3.7 3.8
Total net sell in 9M :
3.2 3.1 ~US$15-25bn
110.0 101.4
94.8
79.0
63.5
2018 2019 2020 2021 Jun-22

Foreign Reserves (US$bn) Equivalent of import months
Source: FiinResearch from IMF
54
Contents
Page
5.1 Macro-economic updates 49-54
5.2 Key figures of the banking system 55-57
55
5.2. Key figures of the banking system Key banking figures
Credit growth recovered strongly in the first 9 months of 2022
Figure 49: YTD Credit growth (systemwide)
12% 10.47%
9.91%
9.27%
9% 7.88%
6%
6.08%
3%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep
2022 2021 2020
Source: FiinResearch from SBV Note: Real estate trading & services include real estate trading, consultancy, brokerage
and auctioning.
Figure 50: Credit limit and credit growth of selected banks, 1H2022
20% 18.4% 18.2% 17.7% Most commercial banks need an extension of credit growth limit as they
16.2% 15.7% used up granted room for 2022 within the first 6 months
15% 13.1% 13.0%
11.7% 10.7% 10.7%
14.8% 14.6% 14.4%
10%
12.2%
9.1% 9.8% 9.7% 9.7% 9.4%
5% 7.6%
0%
HDB MBB VCB TPB VPB OCB VIB TCB CTG BID
Credit limit (originally granted) Credit limit (adjusted) YTD credit growth
Source: FiinResearch from NFSC. Industries with large proportion in total credit outstanding are illustrated in figures.
56
5.2. Key figures of the banking system Key banking figures
The actual impact of Covid-19 on banks’ asset quality has revealed as restructuring
Circular ends its effectiveness
Figure 51: Non-performing loan (NPL) ratios of credit institutions
8.0% 7.31% Contribution to total on-
Contribution to outstanding credit,
1H2022 balance sheet NPLs, 1H2022
5.76% 5.41%
6.0%
VND2,523trn
3.79% VND54.77trn
3.41% 22% of total 15.0%
4.0% 20.7% Real estate 22.5% of total
credit
1.90% 1.70% 1.4% sector 7.6% NPL amount
1.42% outstanding
2.0%
Consumer
0.0% finance (active
2018 2019 2020 2021 1Q2022 2Q2022 FinCos only)
On-balance sheet NPL ratio Other sectors
Gross NPL ratio (on-balance sheet NPLs, VAMC & potential bad debts)
Adjusted NPL ratio (gross NPLs & potential NPLs from COVID-
restructured loans)
Source: FiinResearch from SBV.
Figure 52: Non-performing loan ratios of major banks
6%
5.3% 2021 1H2022
5% 3.9% Average NPL 2021: 1.44%

Average NPL 1H2022: 1.59%
3% 2.4% 2.3%
1.5% 1.4% 1.3% 1.3% 1.3%
2% 1.2% 1.0% 0.9% 0.8% 0.6% 0.6%
0%
VPB VBB VIB ABB MSB LPB CTG HDB STB MBB BID TPB ACB VCB TCB
Source: FiinResearch from banks’ financial statement
57
FiinResearch is part of FiinGroup, a Vietnam’s leading provider of financial data, business information, industry research
and other data-driven analytics services.
Contact us
Dong Le, CFA Head Office
Managing Director, Market Research and Consulting Services 10th Floor, Peakview Tower, 36 Hoang Cau Street,
T: +84 24 3562 6962 (ext. 110) O Cho Dua Ward, Dong Da District, Hanoi, Vietnam
E: dong.le@fiingroup.vn Tel: +84 24 3562 6962
Oanh Tran Ho Chi Minh City Branch

Manager, Market Research & Consulting Unit 4621, Level 46, Bitexco Financial Tower, 2 Hai Trieu Street,
T: +84 (024) 3562 6962 (ext. 105) Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
E: oanh.trankieu@fiingroup.vn Tel: +84 28 3933 3586/ 85
@ 2022 FiinGroup Corporation. All rights reserved.

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Vietnam Consumer Finance Market

@ 2022 FiinGroup Corporation. All rights reserved.

telephone: +84 (24) 3562 6962 telephone:+ 84 (28) 3933 3586

Date: October 24th, 2022

To: Ms. Anastasia Fokina

63 NII Net Interest Income 89 SMBC CF SMBC Consumer Finance Company

64 NIM Net Interest Margin 90 SME Small and Medium Enterprise

No. Ratio Description Formula Note

The original formular of NIM is Net Interest Income

Loan Loss Coverage

7 CIR Cost To Income Total Operating Cost/Total Operating Income

8 D/E Debt To Equity Debt/Equity

Cost of funding is estimated as expense from credit

Loan Loss Provision (expense)/Total operating

Section Contents Page Section Contents Page

Executive Summary 7 3. Key development trends 38

1.2. Market segmentation 11 3.3. Update on M&A activities 45

Competitive landscape of Finance Companies

2.1. FinCos fast facts 14 5. Appendices 49

2.4. Analysis of FinCos’ financial performance 28

30.9% 18.9% FE Credit

Section 1: Updates of Vietnam consumer finance market

1.1 Market size and growth 8-10

1.2 Market segmentation 11-12

Vietnam Consumer finance market is on track for a steady recovery

92.9% 92.3% 92.7% 92.9% 93.21% 93.15%

• The consumer finance (CF) market has gradually regained growth

CF lending portfolio still secure 21% of total credit to the economy

Section 1: Updates of Vietnam consumer finance market

1.1 Market size and growth 8-10

1.2 Market segmentation 11-12

FinCos’CF and four-wheeler)

Section 2: Competitive landscape of Finance Companies (FinCos)

2.1 FinCos’ fast facts 13-14

2.2 Changes in market positioning 15-17

2.3 Update on product portfolio development 18-27

2.4 Analysis of FinCos’ financial performance 28-37

Section 2: Competitive landscape of Finance Companies (FinCos)

2.1 FinCos’ fast facts 13-14

2.2 Changes in market positioning 15-17

2.3 Update on product portfolio development 18-27

2.4 Analysis of FinCos’ financial performance 28-37

Section 2: Competitive landscape of Finance Companies (FinCos)

2.1 FinCos’ fast facts 13-14

2.2 Changes in market positioning 15-17

2.3 Update on product portfolio development 18-27

2.4 Analysis of FinCos’ financial performance 28-37

CAGR 2018 – 2021 = -9.7% CAGR 2018 – 2021 = 4.1%

FE Credit 1H2022 1H2022

Others JACCS 0.1% -11.2%

04/2015 12/2015 12/2017 04/2019 08/2019 08/2020 2021 08/2022

Section 2: Competitive landscape of Finance Companies

2.1 FinCos’ fast facts 13-14

2.2 Changes in market positioning 15-17

2.3 Update on product portfolio development 18-27

2.4 Analysis of FinCos’ financial performance 2-37

ENR (VNDbn) (*)

JACCS 3,389 4,551 838 466 818 419 510 280 31 50

Shinhan Finance 25.5% 25.1% 12.6% 9.5% 2.7% 2.0% To update

Vietnamese financial system is facing a liquidity crunch on most of funding channels

FinCos continue cost-cutting through speeding up digital transformation as the post-

40.5% 41% 37% 22%

24.0% ROAA ROAE ROAA ROAE