KB expands presence in Cambodia via merger of 2 affiliates

KB Financial Group headquarters in Seoul / Korea Times file

By Lee Min-hyung

KB Kookmin Bank is expanding its presence in Cambodia by merging its two affiliates there ― Prasac Microfinance Institution and Kookmin Bank Cambodia.

KB aims to intensify rivalry against the country's market leader ABA Bank. The combined net profit of Prasac and Kookmin Bank Cambodia is the second-largest following that of ABA in the Southeast Asian country in the first half.

The two KB affiliates are forecast to receive final approvals from the Southeast Asian country's authorities there over the merger in the near future. Cambodian authorities granted preliminary approvals recently, and they will be able to operate as a combined entity as soon as they win a legal license, according to KB.

For years, KB is stepping up its efforts to diversify its sales channels in Asian markets, identifying the region as a major future revenue stream. The company is also widening its footing in Indonesia amid toughening market competition in Korea.

In 2020, KB acquired a 70 percent stake in Prasac and purchased the remaining 30 percent in the latter half of 2021. Kookmin Bank has operated banking and foreign exchange services there as a commercial bank, but the acquisition of a local financial firm was necessary for the KB affiliate's sustainable and robust growth there.

After winning the legal license to launch the combined entity, the two KB affiliates aim to become the leading commercial lender in Cambodia.