KB Kookmin Card enters Thai market

KB Kookmin Card CEO Lee Dong-cheol holds a copy of an agreement at the company's head office in Seoul, Monday, after signing the agreement with Jaymart Group Chairman Adisak Sukumvitaya via an online meeting to acquire a 50.99 percent stake in J Fintech. / Courtesy of KB Kookmin Card

By Park Jae-hyuk

KB Kookmin Card will be the first Korean credit card company in Thailand in the area of retail finance.

The card issuing arm of KB Financial Group said Monday it signed a share subscription agreement to acquire a 50.99 percent stake in J Fintech, a Jaymart subsidiary operating credit and auto loan businesses in the Southeast Asian country, for 650 million baht ($20 million).

Founded in 2011, J Fintech holds 151.6 billion won ($123 million) in assets and has 18 networks with 130 employees as of the end of last year. It posted a 2.6 billion won net profit in 2019.

KB Kookmin Card said it signed the deal via an online meeting as both Korea and Thailand have restricted travel protocols in place due to the COVID-19 pandemic.

The card firm plans to include J Fintech as a subsidiary by the end of this year at the earliest, after getting approvals from the Korean and Thai financial authorities, and going through deal closing procedures.

If so, it will be the first Korean financial firm to enter the Thai market by getting a new license or completing an M&A since a number of Korean financial companies left the Southeast Asian country during the 1998 Asian financial crisis.

“The recent entry into the Thai market was the achievement of two years of preparation to acquire a financial company in the country that has long-term growth potential and can create a synergy effect, considering its financial business environment, demand and continuous growing trend of the local retail financial market,” a KB Kookmin Card official said.

“Based on our success in Indochinese countries, such as Cambodia and Laos, we will develop the company we acquired recently to become the top retail financing firm in Thailand within the next 10 years.”

The latest deal was KB Kookmin Card's third acquisition of a foreign financial firm since CEO Lee Dong-cheol took office in 2018. The card firm entered Cambodia in 2018 and Indonesia in 2019.

Lee promised in his New Year's address that the company would continue its expansion in Southeast Asia.

KB Financial Group said it expects the recent deal will help KB Kookmin Bank and the group's major subsidiaries enter the Thai market in the near future.