HONG KONG/SINGAPORE (Reuters) - Prudential Plc PRU.L has kicked off the sale of its Vietnam consumer finance unit, which could fetch up to $150 million, as the UK firm sharpens focus on its core insurance business in the Southeast Asian nation, people familiar with the process said.
An adviser has been appointed as part of the sale process of Prudential Vietnam Finance Company Ltd, which is in an early stage, two of the sources said. They said interested buyers include private equity firms and financial services companies, though Reuters was not able to ascertain names of potential bidders.
A sale of Prudential Vietnam Finance, which offers personal and mortgage loans, would mark Prudential’s first major asset divestment since it named its former group CFO, Nic Nicandrou, as the head of its Asia business last year.
The move comes as some global insurers, including AXA AXAF.PA, are similarly looking to sell smaller and non-core units in Asia to better focus on their main insurance businesses in a region that is attractive due to low insurance penetration, but is also hyper competitive.
Prudential has a separate insurance business in Vietnam, which is much smaller compared to its major Asian markets that include Hong Kong, Singapore, China and Indonesia, and which it plans to focus on after the finance unit sale, said the people, who did not wish to be named as they were not authorized to speak to the media.
A Hong Kong-based spokeswoman for Prudential’s Asia unit declined to comment on the possible sale of the Vietnam consumer finance unit.
Started in 2007 as the first fully foreign-owned consumer finance company in Vietnam, the insurer's finance unit had about 300,000 customers by October 2016, its website (here) showed.
Annual premium and contribution equivalents, a key growth metric for insurers, in Vietnam rose to 62 million pounds ($82 million) in the first half of 2017, compared to 914 million pounds in Hong Kong and 144 million pounds in Indonesia.
Prudential reported a 25 percent rise in first-quarter new-business profits in May worldwide, and its operating profit rose to 2.36 billion pounds in the first half, also boosted by growth in Asia.
The insurer, however, has been selling or restructuring some units to save costs - last month it sold its broker-dealer network in the United States for $325 million and merged its M&G asset management and UK and European insurance businesses.
($1 = 0.7532 pounds)
Reporting by Sumeet Chatterjee in HONG KONG and Anshuman Daga in SINGAPORE; Editing by Muralikumar Anantharaman
Our Standards: The Thomson Reuters Trust Principles.