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| KB Financial Group Chairman & CEO Yoon Jong-kyoo |
KB Kookmin Bank has stepped up its efforts to strengthen its foothold in Southeast Asia by acquiring a 22 percent stake in Indonesia's Bank Bukopin on Friday, the lender announced, Monday.
The announcement came after the lender signed an agreement on June 26 to purchase new shares issued by the Indonesian bank, and Indonesia's Financial Service Authority approved the bank as an eligible institution for the takeover on June 29.
With the acquisition, Korea's largest lender by assets has become the Indonesian bank's second-largest shareholder with the shares valued at about $100 million.
It marks the bank's re-entrance into Indonesia 10 years since it exited from the Southeast Asian country by selling off its stake in BII Bank to Malaysia's Maybank in 2008.
Specialized in retail banking, Bank Bukopin is Indonesia's 14th-largest commercial lender in terms of capital with 322 branches across the country.
"Keeping up with the Moon Jae-in administration's New Southern Policy, KB Kookmin Bank's foothold in Southeast Asia is expanding into Indonesia, one of the growing powerhouses in the ASEAN region," a KB Kookmin official said.
"KB has already boasted its strong presence in other Southeast Asian countries such as Vietnam, Cambodia and Myanmar, and the bank's latest move will establish a firmer foothold in the rapidly growing region."
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| KB Kookmin Bank CEO Hur Yin |
KB Financial Group Chairman & CEO Yoon Jong-kyoo said the group will diversify its business portfolio and discover a new growth engine to cement its leading position in the nation's financial sector under his business strategy, "RACE 2018."
The move is a part of the financial group's efforts to stretch its business portfolio into foreign markets, and the lender is already actively engaged in Vietnam and India.
It already won a preliminary license as an eligible financial institute in Hanoi, Vietnam, and Gurgaon, India, earlier this year, and the official said it aims to open its branches in both cities early next year.
Other commercial banks in Korea have also eyed the Southeast Asian market as they face difficulties in finding new revenue sources in the saturated domestic market.
Noticing the region's growth potential with ample population, lenders have paid attention to the rapidly-growing region.
Shinhan Bank Vietnam, the commercial bank's local affiliate in the country, acquired ANZ Bank Vietnam's retail division in April 2017. Now employing about 1,500 employees in 30 branches there, it is the largest foreign bank in the country.
KEB Hana also signed a strategic partnership MOU with Laos' top bank by assets last July, establishing a foothold in the region.
In a bid to help local lenders make inroads into foreign markets, the Financial Supervisory Service (FSS) said it will soon begin a one-on-one consulting service where a financial firm can ask questions or submit suggestions related to its business expansion abroad.
According to the FSS, the number of branches of Korean banks operating abroad reached 431 at the end of 2017, up from 407 in 2016 and 382 in 2013.
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