Lender, real estate companies revive brokerages to mobilize fund

VPBank Securities (ASCS) is set to become the second biggest brokerage in Vietnam after its capital is increased 33 times to VND8.92 trillion ($391 million) two months after the lender acquired it.

Late last year, people related to real estate group Tan Hoang Minh acquired at least 42 percent of Golden Lotus Securities after major investors withdrew from the company.

Earlier last year, brokerage Vietnam Gateway became the latest addition to the ecosystem of real estate firm Sunshine Group and saw its name changed to KS Securities.

These moves seen as a “revival” of small brokerages as companies in other businesses like banking and real estate seek to mobilize funds through different instruments.

KS Securities, after a year of receiving the new investments from Sunshine Group, saw its charter capital rising ten-fold to over VND1 trillion.

After suffering a loss of VND1.7 billion in 2020, the company posted a profit of VND283 billion the very next year.

Most of its VND900 billion in additional funding was spent on bonds, with the Sunshine Group stepping up the issuance of bonds last year.

Golden Lotus Securities also became a part of Tan Hoang Minh as the group sought to complete its financial ecosystem to serve increasing demand for issuing bonds

Last year, Tan Hoang Minh’s brokerage unit Ngoi Sao Viet raised VND2.7 trillion through bonds.

VPBank also adopted the same strategy, purchasing a stake in the new brokerage after divesting from VPS Securities five years ago.

“The new securities company will help VPBank expand its services. We do not aim to compete for market share,” said VPBank CEO Nguyen Duc Vinh at a meeting with analysts last week.

Some analysts expect that lenders like VPBank could follow the model applied by Techcombank, which is to use a brokerage to mobilize money through bonds, focusing on both corporate and individual investors.

Last year, Techcombank Securities posted a profit of VND3 trillion, exceeding that of other major competitors like SSI Securities Corporation and VNDirect.