Yesterday (March 28), Thu Duc City Police (Ho Chi Minh City) coordinated with professional units to inspect Home Credit Vietnam Company Limited (Home Credit Vietnam) at building number 20 Nguyen Dang Giai, Thao Dien ward, Thu Duc City, Ho Chi Minh City.
According to research, Home Credit is a global consumer finance group that entered the Vietnamese market in 2008, 100% owned by PDF Group. Currently, Ms. Annica Witschard is the CEO of Home Credit Vietnam (since 2020).
Home Credit provides consumer finance products in three main categories: installment loans for consumer goods (motorbikes, household appliances, electronics, furniture, etc.), cash loans and credit cards.
The finance company has about 6,000 employees and has served 12 million customers.
At the same time, Home Credit has connected more than 3,000 Payoo payment points, 4,000 MoMo payment points, linked with the post office system of Vietnam Post, Viettel store system and banks nationwide.
Continuously mobilize bonds
In the Vietnamese market, along with FE Credit, Home Credit is one of the leading companies in the field of installment consumer loans.
Home Credit mobilizes capital in the form of receiving deposits from organizations, based on its operating license. At the same time, it borrows capital from credit institutions, foreign and domestic financial institutions according to the provisions of law , and issues certificates of deposit, bills of credit, promissory notes, and bonds to mobilize capital for organizations.
In addition, the company also provides credit in the form of loans, including consumer loans and installment loans, as well as issues credit cards, according to information from its operating license.
However, not backed by domestic parent banks such as FE Credit whose major shareholder is VPBank; MCredit is a subsidiary of MBBank and HDSaison is a subsidiary of HDBank or has many deals calling for foreign investment capital such as F88, Home Credit mobilizes capital mainly from issuing bonds.
In less than 1 month in 2022, Home Credit has issued a total of 1,100 billion VND in bonds.
Accordingly, most recently in October 2022, Home Credit successfully mobilized VND 200 billion in 18-month bonds, including 200 bonds with a face value of VND 1 billion, maturity date March 15, 2024.
Information about interest rates, bondholders, or the party arranging this deal was not disclosed. However, in early March 2023, SSI Securities Company had 3 announcements about receiving the first interest rate for 3 bond lots of Home Credit Vietnam.
On August 31, 2022, the company successfully completed the issuance of a bond lot worth VND 600 billion. Previously, on September 13, Home Credit also successfully mobilized VND 300 billion in 18-month bonds, including 300 bonds with a face value of VND 1 billion/bond.
Thus, in less than 1 month, Home Credit has issued a total of 1,100 billion VND in bonds.
Revenue and profit continue to decline
According to credit rating company Fitch Ratings' assessment of Home Credit, the long-term issuer default rating (IDR) is at 'B+' and the short-term issuer default rating is at 'B'.
According to the rating agency, Home Credit has maintained a healthy capitalization with a leverage to equity ratio of less than 4 times since 2013. However, the company increased its receivables at a faster rate than its equity in the following years. Receivables increased by 67% in 2016 and 52% in 2017.
According to Fitch Ratings, Home Credit's receivables are not low, at 2.1% of the total portfolio in 2017 and 2.6% in 2016. Return on assets (ROA) was high at 11.0% in 2017 (up from 11.7% in 2016), supported by a high net profit margin of 30.3%.
However, this ratio gradually decreased afterwards, by 2019 ROA was estimated at 6.1%. Fitch Ratings' estimated figures also show that in 2019, 55% of Home Credit's total loans were funded by bank loans and 45% by certificates of deposit.
As of the end of 2020, the company's total assets were VND 22,316 billion, of which equity was VND 4,639 billion, accounting for 21% of capital.
Revenue in 2020 reached only 638 billion VND, accounting for only 39% compared to 2017. Although by the end of 2021, the total assets of this financial company had exceeded 1 billion USD to 26,571 billion VND, an increase of nearly 50% compared to 4 years ago. However, revenue remained almost flat during this period and was around 5,000 billion VND.
Accordingly, after-tax profit also continuously decreased, down to 550 billion VND in 2021, only 1/3 compared to 2017 .
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