JB Financial acquires Vietnamese brokerage from Morgan Stanley

JB Financial Group has completed the acquisition of a Vietnam-based brokerage previously owned by global investment bank Morgan Stanley, as part of the local banking group’s effort to make inroads into Southeast Asia.

JB Financial Group said Wednesday it paid 19.9 billion won ($16.1 million) for a 100 percent stake in Morgan Stanley Gateway Securities, a midsized brokerage headquartered in Hanoi. Founded in 2006, the firm posted some 300 billion Vietnamese dong ($12.7 million) as capital on operations as of last year. 

“The M&A completed successfully considering our payment was merely 1.05 times higher than MSGS’ equity capital which came to 18.9 billion won,” said an official at JB Financial.

As the new brokerage has become a subsidiary of JB Kwangju Bank based in South Jeolla Province, the financial group’s subsidiaries including grandson companies now increase to seven. Upon the takeover, JB Financial became the country’s first financial group outside of Seoul that incorporates banking, capital and securities in its overseas financial network, raising expectations for an increase in nonbanking revenue. 

The acquisition is expected to strengthen the group’s business foothold in the Southeast Asian region. 

Earlier, the bank acquired Phnom Penh Commercial Bank of Cambodia through its subsidiary Jeonbuk Bank in North Jeolla Province and established JB Capital’s overseas branch in Myanmar in 2016. 

Through its newly acquired firm, JB Financial will also provide domestic investors with investment strategies regarding real estate and infrastructure development in Vietnam. The group plans to provide the Vietnamese companies with services like arranging corporate bond issuances or mergers and acquisitions.

Meanwhile, the latest acquisition process was scheduled to be done in January in line with a stock purchase deal between JB Financial and Morgan Stanley made in December last year, but it was delayed for some three months as the Vietnamese government blocked the entry of foreigners to combat the coronavirus outbreak, making it hard for JB officials to visit the local brokerage firm and proceed residual payment for the acquisition. 

By Choi Jae-hee (cjh@heraldcorp.com)