Sumitomo Mitsui Financial Group Inc will buy a 74.9 per cent stake in Fullerton India Credit Co for about $2 billion, marking the first entry into the South Asian country's retail financial business by a Japanese bank.

Japan's second-largest lender will eventually acquire the rest of the Indian credit firm from Fullerton Financial Holdings Pte, it said in a statement Tuesday, confirming an earlier Bloomberg News report.

With the acquisition, Fullerton India will become a consolidated subsidiary of Sumitomo Mitsui, it said in a separate statement. Fullerton Financial is a unit of Singapore's state investment fund Temasek Holdings Pte.

Faced with weak growth prospects at home, Sumitomo Mitsui has been allocating resources to Asia's emerging markets in recent years. The bank took control of Indonesian lender PT Bank Tabungan Pensiunan Nasional in 2019 after acquiring a minority stake earlier. Sumitomo Mitsui is looking for targets in Vietnam, Philippines and India, Chief Executive Officer Jun Ohta said in an interview in December. Sumitomo Mitsui in April agreed to buy a 49% stake in Vietnamese consumer lender FE Credit. Last month, the bank said it will buy a 4.99% stake in Rizal Commercial Banking Corp. of the Philippines for 4.48 billion pesos ($91 million). (Bloomberg)