KB Kookmin Card will make inroads into Indonesia. Kookmin Card signed an agreement in Jakarta on Nov. 28 to buy shares of PT Finansia Multi Finance, a local credit finance company.
The financial company that Kookmin Card bought this time runs a car, motorcycle and durable goods installment financing business there, and Kookmin Card will acquire 80 percent of the two private equity funds for $81.28 million.
Founded in 1994, the company is a mid-sized one with 325.1 billion won in total assets, 63.2 billion won in equity capital and 9,800 executives and employees with an average net profit of 5 billion won over the past five years.
It has an advantage in its installment financing business based on its extensive business network, including 137 branches across Indonesia, Kookmin Card explained.
Loans for motorcycles and durable goods are the third-largest in the industry in terms of the amount of loans handled, while those for cars are the fifth-largest in the industry.
Kookmin Card will officially launch it as an overseas subsidiary early next year after the approval process and the Post-Merger Integration (PMI) by the financial authorities.
In the short term, the company plans to offer competitive interest rates by reducing procurement costs through payment guarantees from its headquarters, and to expand installment financing products to conduct high-quality asset-oriented operations.
In the mid- to long-term, the company plans to diversify its installment financing business by transferring the product development, risk management and digital capabilities of Kookmin Card.
In addition, it will seek early settlement of the market through synergy effects between KB Financial Group affiliates, including KB Kookmin Bank's Bukopin Bank, which entered Indonesia, and KB Capital's local subsidiaries.
