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Home Credit Plans Asian Expansion for Growth, Chief Says

March 8 (Bloomberg) -- Home Credit BV, the consumer lender controlled by Czech billionaire Petr Kellner, expects its operation in China to surpass the current value of its business in Russia in three years as it expands in Asia.

“We believe that our Chinese business over the next three years can pass the current size of Russia in profitability,” Chief Executive Officer Alexander Labak said in an interview in the company’s Prague headquarters. “If you look at Home Credit in five years it will be one-third Europe, two-thirds Asia.”

Home Credit, which is part of Kellner’s PPF financial group, has been focusing on providing retail loans, cash loans and deposit services in eastern Europe. In Russia it had a net loan portfolio worth 2.7 billion euros ($3.56 billion) last year which accounted for some 90 percent of its European loan portfolio.

The company, which set up a corporate headquarters in Hong Kong, is looking to boost its operations in China and Vietnam. It entered India, established a base in Indonesia and plans to set up an operation in the Philippines in 2013. In China, it participated in a pilot project to offer consumer finance in cities such as Tianjin, overseen by Chinese regulatory bodies.

“We’re profitable in China and we’re in talks with Chinese regulatory bodies to further allow to offer consumer finance in other regions,” Labak said. “There’s a clear desire on the Chinese side to stimulate consumer demand.”

Chinese and other Asian markets are “sizable” with a “huge” appetite for consumption, he said, adding the complexities of working in Asia distinguish them from Europe.

Regional Diversity

Specifically, issues such as migration of workers every six months in China, language barriers in different Indian regions and a higher risk of fraud all make working in the Asian markets different than in Europe, he said.

In China, Home Credit started to use a biometric system to counter potential fraudsters, Labak said.

“We want to be a profitable and sizeable player in India and Indonesia and find a comfortable position in Philippines,” Labak said.

Home Credit BV 2011 net income declined to 231.3 million euros from 234.2 million euros a year ago, the company said on March 1. Net income for 2011 at its Russian unit increased 14.3 percent to 10.8 billion rubles ($366 million).

PPF is a Czech financial group with assets worth as much as 12.4 billion euros in banking, insurance, real estate, mining and retail. It has operations in Eastern Europe and Asia.

To contact the reporter on this story: Lenka Ponikelska in Prague at

To contact the editor responsible for this story: James M. Gomez at

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