Vietcombank Said to Tap Credit Suisse to Find Insurance Partner
(Bloomberg) -- Bank for Foreign Trade of Vietnam JSC, the nation’s biggest listed lender by market value, appointed Credit Suisse Group AG to advise on finding a new insurance distribution partner, people with knowledge of the matter said.
Vietcombank, as the firm is known, plans to invite bids from insurers for the exclusive rights to distribute life insurance products through its branch network, one of the people said. The so-called bancassurance agreement is expected to be for at least a decade, according to the person. A deal could be worth as much as $1 billion over the life of the contract, depending on how it is structured, the people said.
Insurers have been attracted to a growing middle class in Vietnam, which has chalked up average economic growth of 6.3 percent annually between 2005 and 2017. Last year, a flurry of bancassurance deals in the country were inked, including Saigon Thuong Tin Commercial Joint-Stock Bank’s 20-year agreement with Dai-ichi Life Holdings Inc. and Techcombank’s 15-year partnership with Manulife Financial Corp.
Banks in Singapore, Malaysia and Indonesia have also struck lucrative deals in recent years, with DBS Group Holdings Ltd. signing a S$1.6 billion ($1.2 billion) insurance distribution agreement with Manulife in 2015. Vietcombank’s deliberations are at an early stage, and the size of the potential deal could change, the people said.
An official at Vietcombank and a representative for Credit Suisse declined to comment.
Hanoi-based Vietcombank employs more than 15,000 people, with over 500 banking outlets and 2,300 ATMs, according to its website. In 2007, the bank formed a joint venture with BNP Paribas SA’s life insurance unit Cardif and Vietnamese lender SeABank to develop insurance products.
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