KB Kookmin Bank Completes Acquisition of Stake in Cambodia's Prasac Microfinance

Acquisition of Cambodia's No.1 Local MDI and 3rd Largest Bank Sector Leading Financial Institution
70% Stake Purchased for $603 Million... Additional 30% Acquisition Planned
Securing a Base to Strengthen Global Growth Engines... Expanding Southeast Asia Business

[Asia Economy Reporter Kangwook Cho] KB Kookmin Bank announced on the 12th that it has completed the payment of $603 million (approximately 730 billion KRW) for a 70% stake in Prasac Microfinance, Cambodia's largest Microfinance Deposit-taking Institution (MDI).

With this, KB Kookmin Bank has successfully completed the acquisition process of the stake in Prasac Microfinance, which was resolved by the board of directors on December 26 last year.

KB Kookmin Bank has been simultaneously fulfilling the preconditions for the acquisition, including approvals from domestic and international financial authorities, while operating an integrated task force that includes employees from KB Financial Group and Prasac Microfinance to smoothly carry out the pre-merger integration (PMI) work. With this acquisition, Prasac Microfinance will be incorporated as a subsidiary of KB Financial Group, and KB Kookmin Bank plans to acquire the remaining 30% stake to make it a 100% wholly owned subsidiary.

Prasac Microfinance operates over 180 branches in Cambodia and, as of 2018, holds a market share of 41.4%, an ROE of 29.4%, and a net income of approximately $78 million, making it the overwhelming leader among Cambodia's MDIs. It also ranks third in loan market share among all financial institutions in Cambodia, including commercial banks.

Earlier, on the 9th, KB Kookmin Bank obtained a preliminary license for a local subsidiary in Myanmar's third phase of banking liberalization. This local subsidiary license allows the establishment of up to 10 branches in Myanmar and grants the qualification to conduct all banking operations, including corporate and retail banking. Following the acquisition of the preliminary banking license in Myanmar and the completion of the Prasac Microfinance stake acquisition, KB Kookmin Bank has secured two major bases to strengthen its global growth engine in the New Southern countries.

A KB Kookmin Bank official said, "This acquisition of Prasac will be an important turning point in expanding KB Kookmin Bank's global strategy of building an Asian retail network," adding, "In the long term, we will pursue becoming a leading bank in Cambodia through conversion to a commercial bank."

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