KB Kookmin Card buys 80% stake in Indonesian credit finance firm for $81 mn

South Korea’s KB Kookmin Card Co. will take over a major credit finance company in Indonesia, the latest in a series of moves by its parent KB Financial Group to broaden its presence in Southeast Asia.

The board of KB Kookmin Card on Wednesday signed off the plan to buy an 80 percent stake in Indonesia’s PT. Finansia Multi Finance (FMF) for 94.9 billion won ($80.7 million). The company plans to close the deal by the first quarter of 2020.

Founded in 1994, FMF specializes in lease and auto and motorcycle financing, and ranks fifth among Indonesia’s credit finance institutions. With total assets of 255 billion won, it has generated steady net profit for the past four years. It is considered to have more robust digital capabilities compared to its Indonesian peers, being one of the early players to provide an online loan service through its digital platform Credit Plus. Lately it has been making aggressive moves into mobile as well.

KB Financial Group in recent years has looked increasingly toward Southeast Asia as a source of new growth. With Indonesia, the region’s largest economy, as its key outpost, the group has been extending its network to countries including Vietnam, where its rival Shinhan Group has been making huge inroads, as well as Myanmar, Cambodia and Laos, which have just started to open up their financial markets.

Investment has been most active in Indonesia. In February, KB Capital, the auto financing and leasing services unit, signed a deal with Indonesia’s Sun Motor Group to buy an 85 percent stake in its finance arm, Sunindo Parama Finance.

Founded in 1974, Sun Motor Group is one of the biggest automotive dealers in Indonesia that is also engaged in the car rental and hotel business. With the deal, KB Capital has been offering auto financing services to Mitsubishi, Suzuki, Nissan, Chevrolet and Toyota vehicles that are sold by Sun Motor Group in the country.

In July, KB Kookmin Bank acquired a 22 percent stake in Indonesia’s 14th largest retail lender Bank Bukopin, becoming its No. 2 shareholder. The move marked the Korean lender’s return to the country in more than 10 years after it sold off Bank International Indonesia. KB Kookmin Bank plans to groom its new acquisition by sharing its knowhow in housing finance as well as digital banking and risk management.

KB Kookmin Bank has also been making big moves into Cambodia since last year after forming a joint venture with Kolao Group, a Laos-based company run by a Korean businessman. In April, the two companies acquired full ownership of Cambodia’s Tomato Specialized Bank (TSB), with KB Kookmin owning 90 percent and Indochina Bank, a unit of Kolao Group, the remaining 10 percent. Together, they set up KB Daehan Specialized Bank, offering services in auto financing, credit loans and debit cards.

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