KB Capital Supports Funding for Indonesian Subsidiary... Full-Scale Business Expansion Begins

Decision to Provide Payment Guarantee of Approximately 29.2 Billion Won

[Asia Economy Reporter Ki Ha-young] KB Capital has stepped up support to expand operating funds for its Indonesian subsidiary. This is interpreted as a measure to actively expand business in Indonesia, where operations began last year despite the COVID-19 situation.

According to the industry on the 18th, KB Capital recently held a board meeting and decided to provide a payment guarantee for its local Indonesian subsidiary, 'Sun Indonesia Gukmin Best Finance.' The guarantee is approximately 29.2 billion KRW to expand the operating funds of the local subsidiary.

In February 2019, KB Capital signed a contract to acquire 85% of the shares of Sun Indonesia Finance, a subsidiary of Sun Motor Group, an Indonesian automobile retail company. By investing a total of 12.2 billion KRW, it established the local subsidiary Sun Indonesia Gukmin Best Finance and officially started operations in June last year. Utilizing the network of Sun Motor Group, which operates automobile retail as well as hotel and real estate businesses throughout Indonesia, it provides automobile financial services.

Despite the COVID-19 situation, KB Capital is actively targeting the Indonesian market by leveraging Sun Motor Group's captive market. Indonesia is the largest automobile market in Southeast Asia, achieving stable economic growth of around 5% annually. It is considered a market with very high growth potential due to its population of approximately 270 million, ranking fourth in the world, and a young demographic with an average age of 29. Cooperation with KB Financial affiliates operating in Indonesia, such as Bukopin Bank, KB Insurance, and KB Kookmin Card Corporation, is also anticipated.

Previously, KB Capital entered Laos in the form of a joint venture and quickly brought the local subsidiary onto a normal track. 'KB Kor Lao Leasing,' jointly established with KB Capital holding 51%, Kookmin Card 29%, and LVMC Holdings 20%, showed rapid growth by utilizing the captive market of the LVMC Group (formerly Kor Lao Group). As of the third quarter of last year, KB Kor Lao Leasing recorded a net profit of 3.3 billion KRW.

A KB Capital official said, "Leveraging the experience of early settlement in the Laos market, we are striving to stabilize the Indonesian subsidiary quickly," adding, "In the future, we plan to gradually expand business areas not only in automobile financial services but also in consumer goods installment, motorcycle installment, and rental cars."

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