FE Credit Valuation Analysis

May 21 2021


Check details of this analysis here

On April 28th, 2021, FiinGroup released the valuation analysis on FE Credit through the deal in which VPBank announced its transfer of 49% equity stake in its subsidiary FE Credit to SMBC, a consolidated subsidiary of SMBC Group, Japan with the valuation of US$2.8bn. Below are the key insights:

  • FE Credit is valued at a price to book (P/B) of around 3.4x, price to earning (P/E) of around 22x and Price to loan book of around 0.9x. This is calculated based on FE Credit’s financial data of the year 2020 and its estimated book value after FE Credit’s charter capital is raised to VND10.9 trn.
  • FE Credit’s P/B is around 42% higher than the average of past comparable transactions. In our opinion, FE Credit deserves its valuation which is in line with its new and existing shareholders’ expectation even during the pandemic.
  • In the long term, after the M&A transaction, we expect that FE Credit would benefit from a synergy with SMBC.


  • P/B of FE Credit: Based on FE Credit’s estimated book value at the time of transaction after FE Credit’s charter capital is raised to VND10.928 trn
  • P/E of FE Credit: Based on profit after tax of FE Credit at FY2020
  • Price to loan book of FE Credit: Based on total loan book of FE Credit on 31 March 2021
  • Average P/E, P/B: Simple average of comparable transactions’s valuation in terms of PE, PB. The value  of each transaction is collected from the sellers’ financial statements.
  • Price/Loan book: Not applicable for transaction between Lotte Card and TCB as at the time of transaction, Techcombank Finance did not have consumer finance operations and in substance, it was a transaction to sell a license of a finance company.
  • For the valuation of financial institutions, P/B is the preferred ratio over P/E ratio. Hence, the P/E ratios here are for reference only. In addition, high P/E valuation of comparable transactions is mainly due to the transaction of TCB Finance (a licensed consumer finance company which had yet to come into operation at the time of transaction) in the past.

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