KB Financial Targeting Indonesia, Accelerating New Southern Policy Expansion (Comprehensive)

KB Kookmin Card Provides 300 Billion KRW Payment Guarantee Over 5 Years to Local Consumer Finance Specialist
KB Kookmin Bank Decides to Acquire Additional Shares in Bukopin Bank

[Asia Economy reporters Kangwook Cho and Hayoung Ki] KB Financial Group is accelerating its push into Indonesia, which it regards as a foothold for its New Southern Policy expansion. Following KB Kookmin Bank's plan to acquire up to 67% of shares in Indonesia's retail finance specialist 'Bank Bukopin,' KB Kookmin Card has decided to provide a payment guarantee worth 300 billion KRW to the credit finance company 'PT Finansia Multi Finance.' This move is seen as a sign that the group’s New Southern Policy, led by KB Financial Chairman Yoon Jong-kyu, is gaining significant momentum.

According to the financial sector on the 21st, KB Kookmin Card held a board meeting on the 16th and decided to provide a payment guarantee worth 300 billion KRW over five years to the Indonesian local credit finance company 'PT Finansia Multi Finance.' This payment guarantee aims to ensure stable funding for the Indonesian subsidiary. By reducing funding costs, competitive interest rates can be offered to customers. A KB Kookmin Card official said, "We decided on the payment guarantee to enable the Indonesian corporation to secure stable funding," adding, "Considering local circumstances, it is scheduled to officially launch within this year."

Earlier, in November last year, KB Kookmin Card signed a stock purchase agreement (SPA) to acquire shares in PT Finansia Multi Finance and recently completed the process of acquiring 80% of PT Finansia Multi Finance’s shares from a private equity fund for 87.9 billion KRW.

Subsequently, KB Kookmin Card is expected to change the company name to 'KB Finansia Multi Finance' and incorporate it into KB Financial Group. In particular, the plan is to develop the Indonesian subsidiary into a large-scale comprehensive credit finance company covering everything from consumer goods installment finance to credit cards in the mid-to-long term. PT Finansia Multi Finance is KB Kookmin Card’s second overseas local subsidiary after Cambodia. The company is a medium-sized firm with total assets of 325.1 billion KRW, equity capital of 63.2 billion KRW, and about 9,800 employees, recording an average net profit of around 5 billion KRW over the past five years. Notably, it has a strong presence in the installment finance business based on an extensive network of 137 branches and a total of 248 outlets across Indonesia. In terms of credit volume, motorcycle-secured loans and durable goods loans rank third in the industry, while automobile-secured loans rank fifth.

Yoon Jong-kyu, Chairman of KB Financial Group

KB Kookmin Bank Acquires 67% Stake in Indonesia’s Bank Bukopin

At a board meeting held on the same day, KB Kookmin Bank decided to proceed with an additional acquisition of shares in Bank Bukopin, a medium-sized Indonesian bank. As a result, KB Kookmin Bank will increase its stake in Bank Bukopin to up to 67%, becoming the largest shareholder.

A KB Kookmin Bank official said, "With the cooperation of OJK, KB Kookmin Bank will be able to hold up to 67% of Bank Bukopin’s shares by the end of August without acquiring any additional troubled banks, and the management approval process will be simplified," adding, "This additional share acquisition is a significant deal as it is practically the first case of acquiring management rights of an overseas listed bank of a certain scale."

Bank Bukopin is a medium-sized bank with an extensive network covering Indonesia, including 412 branches and 835 ATMs. It has traditionally secured its customer base through pension loans, cooperative member loans, and small and medium-sized enterprise (SME) loans. After acquisition, KB Kookmin Bank plans to integrate systematic risk management know-how and advanced digital capabilities to enhance Bank Bukopin’s retail strengths. If the share acquisition deal is successfully completed, it is expected to lay the foundation for growth as a comprehensive financial group in Indonesia alongside KB Insurance, Card, and Capital, which have already entered or plan to enter the market.

It is not only Indonesia. In April, KB Kookmin Bank acquired a 70% stake in Prasac Microfinance, Cambodia’s top microfinance bank. Recently, it also agreed to provide an additional loan of 150 million USD (about 180 billion KRW) to Prasac, strengthening financial ties. KB Kookmin Bank plans to acquire the remaining 30% stake to make it a wholly owned subsidiary.

Chairman Yoon’s New Southern Policy, which he has been promoting based on a blueprint to grow KB Financial Group into a leading financial group in the global market, is gradually showing results.

A financial sector official said, "Chairman Yoon has accumulated market understanding and experience by leading overseas expansions in Cambodia, Laos, Myanmar, Vietnam, and Indonesia over recent years," adding, "As he stated in the New Year’s address earlier this year, he is expected to pursue more aggressive New Southern Policy strategies through bold mergers and acquisitions (M&A)."

This content was produced with the assistance of AI translation services.