(Bloomberg) -- SCB X Pcl, Thailand’s biggest bank by market value, agreed to buy consumer lender Home Credit NV’s business in Vietnam for about $860 million in a bid to widen its regional footprint.

The purchase by SCB X’s Siam Commercial Bank Pcl unit should be completed by the first half of next year, subject to regulatory approvals, the Bangkok-listed financial group said in a statement Wednesday. Bloomberg News first reported news of the deal on Tuesday.

The deal is a milestone in SCB X’s ambitions to be a leading regional financial technology group, Chief Executive Officer Arthid Nanthawithaya said in the statement. 

“This strategic acquisition strengthens our presence in the high-growth ASEAN market and also increases value and maximizes return to our shareholders in the long term,” he said.

The Home Credit purchase marks the Thai lender’s entry into Vietnam and hands it about 14% of the country’s consumer finance market, 15 million customers, 14,000 point-of-sale locations and an experienced management team, the CEO said. The purchase will be net positive to the bottom line, he said.  

The acquisition will enable SCB X to expand in Vietnam, which has higher economic growth than Thailand, Rasmiman Sermprasert, an analyst at Krungsri Securities Co., wrote in a note, adding that consumer loans usually have high credit costs and risk being non-performing. 

Shares of SCB X fell as much as 1.3% in Bangkok on Thursday, the biggest drop in two weeks. SCB X has advanced 6.1% this year, compared with a 3.3 decline in a gauge of Thai banking stocks. 

Home Credit kicked off the sale of its Vietnamese unit last year. The business also attracted interest from Thailand’s Kasikornbank Pcl and KB Kookmin Bank, a unit of South Korea’s KB Financial Group Inc., Bloomberg reported at the time.

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Home Credit is streamlining its operations as owner PPF Group NV — controlled by late Czech billionaire Petr Kellner’s family — shifts investment focus back to Europe. Home Credit has been reviewing its businesses in Asia after canceling a $1.5 billion Hong Kong initial public offering in 2019.

The lender disposed of its units in Indonesia and the Philippines to Bank of Ayudhya Pcl, a Thai arm of Japanese bank Mitsubishi UFJ Financial Group Inc. Home Credit employs 6,000 people in Vietnam, PPF said in a separate statement Wednesday.

Founded in 1997, Home Credit has operations in several countries across Asia, central and eastern Europe, and the former Soviet Union. PPF is a holding company with interests in finance, telecommunications, manufacturing, media and biotechnology. Kellner was 56 when he died in a helicopter crash in 2021.

Home Credit Vietnam reported net income of 1.32 trillion Vietnamese dong ($53.5 million) in 2022 and has a cumulative growth rate of 18.7% in total assets over the last decade, SCB X said. 

--With assistance from Anuchit Nguyen.

(Adds analyst’s comment and share price in sixth and seventh paragraphs.)

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