Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
KB-controlled Indonesian bank rises in Jakarta financial watchdog's rating
Board of directors and executives from KB Kookmin Bank and KB Bukopin pose during a shareholders' meeting of KB Bukopin at its headquarters in Jakarta, Indonesia, in this photo taken in August 2020. KB Kookmin Bank has been KB Bukopin's largest shareholder since July 2020. Korea Times file
By Yi Whan-woo
By Yi Whan-woo
An Indonesian bank controlled by KB Kookmin Bank has received virtually the highest rating from Indonesia's financial watchdog, the Korean lender said Sunday.
KB Bukopin moved up its risk-based bank rating (RBBR) to Level 2 from Level 3 on a five-point grading scale from Otoritas Jasa Keuangan (OJT), an Indonesian government agency that regulates and supervises the financial industry.
The rating was developed to measure Indonesian commercial banks' liquidity, corporate governance and other factors concerning financial soundness.
No commercial bank operating in Indonesia has received a Level 1 rating so far, according to KB Kookmin Bank, meaning KB Bukopin currently holds the highest grade among its competitors.
“The elevation in KB Bukopin's rating is anticipated to let the firm introduce a wide range of new services, especially in the digital banking sector,” KB Kookmin Bank said in a press release.
KB Kookmin Bank has invested about 800 billion won ($561.4 million) in KB Bukopin to acquire its stake since 2018.
The Korean lender has held a majority 67-percent stake in KB Bukopin since July 2020 and possesses managerial rights.
The years-long investment comes as KB Financial Group, the parent of KB Kookmin Bank, targets Indonesia as a new major market outside Korea and concentrates on expanding its businesses.
Along with banking services, KB Financial Group has credit card, securities, insurance and other non-banking operations as Korea's largest financial services group.
Established in 1970, KB Bukopin is ranked 19th among 115 commercial banks in Indonesia.
It is the largest Indonesian lender owned by a Korean firm to date.