SHB Finance is a top 10 consumer finance company in Vietnam. Credit: mohamed Hassan from Pixabay.

Thailand’s Bank of Ayudhya (Krungsri) has signed an agreement with Saigon-Hanoi Commercial Joint Stock Bank (SHB) to acquire SHBank Finance Company (SHB Finance).

The acquisition will be completed in two parts, initially, only 50% of SHB Finance’s charter capital will be transferred to the Bank of Ayudhya and the remaining will be transferred after three years, which is subject to certain conditions and regulatory requirements.

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As per several media reports, the deal is valued at approximately $156m.

Bank of Ayudhya expects the acquisition of SHB Finance, which is a leading finance firm in Vietnam, to further its growth in the ASEAN region.

SHB Finance has business in 46 provinces and cities and caters to approximately 300,000 borrowers.

Bank of Ayudhya president & CEO Seiichiro Akita said: “SHB’s local expertise and an extensive network in Vietnam complemented by Krungsri’s strength in consumer finance will enhance SHB Finance’s business competitiveness.

“Together, we will develop and deliver quality consumer finance products to customers in Vietnam. This milestone also underscores our commitment to ASEAN expansion strategy following our current medium-term business plan covering 2021-2023.”

Currently, the Bank of Ayudhya operates a branch and a consumer finance business in Lao PDR, a commercial bank in Cambodia, a consumer finance business in the Philippines, and a representative office in Myanmar.

Japanese financial giant Mitsubishi UFJ Financial Group owns a 76.88% stake in the lender, which is Thailand’s fifth-largest bank by assets.

In 2019, the country’s Bangkok Bank acquired Indonesia-based Bank Permata for $2.7bn in a bid to expand outside Thailand.