KB Kookmin Bank said in a recent board of directors’ meeting that it has decided to acquire a 70 percent stake in Prasac Microfinance Institution Ltd., the largest deposit-taking micro-loan institution in Cambodia.
After becoming the No. 1 shareholder with the stake, the company plans to acquire the remaining 30 percent stake in two years.
Prasac Microfinance is the No. 1 MDI with 41.4 percent market share in 2018 and 177 business networks in Cambodia.
Prasac Microfinance ranks third among Cambodia’s total financial institutions, including banks, and generates stable profits based on high growth, including 29.4 percent in ROE, 8.3 percent for NIM and about $78 million in net profit in 2018. The NPL ratio is also managed at a stable level of 0.7%.
The acquisition price of Prasac is $603.4 million (about 70.2 billion won) and 2.13 times for the PBR (the book value expected at the end of 2019) and is lower than the average acquisition price of financial institutions traded in Cambodia since 2015.
Currently, KB Kookmin Bank has established a bank corporation in Cambodia to operate six branches. It is expanding its market influence based on its business experience and know-how in propelling Liiv Cambodia Digital Bank for local customers over a decade.
"As Prasac Microfinance, which is acquired this time, is showing strong earnings, including about $78 million (90.7 billion won) in net profit and 29.4 percent in ROE in 2018. It is expected to contribute to improving profitability indicators of KB Financial Group, including ROE and EPS, starting in 2020 and the improvement in the scope of its 100 percent stake acquisition is expected to grow further," said an official at KB Financial Group.