South Korea’s state-run Industrial Bank of Korea said Aug. 18 it will launch a bank in Indonesia after receiving the green light from authorities for the merger of PT Mitraniaga and PT Bank Agris it acquired last year.
The merged banks will be launched as PT Bank IBK Indonesia on Sept. 5, the lender said.
In Feb. 2018, IBK acquired 87.34 percent stake in Bank Agris in its first overseas acquisition to make a foray into the Southeast Asian country with a population of 265 million. In April 2018, the Korean bank obtained a 71.7 percent stake in another Jakarta-based bank Bank Mitraniaga.
The Korean bank got approval for acquisition of the two companies in December last year from the Financial Services Authority of Indonesia.
IBK headquarters in Seoul
IBK Indonesia will begin operations with a total of 30 branches in the country. With a plan to expand the network to 55 by 2023, it will finance mirco, small and medium-enterprises there.
“Indonesia is a key partner nation in South Korea’s New Southern Policy and about 2,000 Korean companies have a presence there,” an official at the bank said. “With the approval, we’re one step closer to IBK Asian Financial Belt,” the official added.
To build up the proposed IBK Asian Financial Belt, the bank’s global growth strategy focusing on Southeast Asia, it is upgrading offices in Vietnam to corporate entities while mulling to set up its business in Myanmar.
Betting on the potential of the country with the world’s fourth-largest population, Korea’s major lenders such as Woori Bank, Shinhan Bank and KEB Hana Bank entered the market in recent years.
On the part of Indonesia, the financial authorities have been trying to trim the number of more than 100 local banks. As part of such efforts, it allows foreign investors to buy a stake in a bank of up to 40 percent if the investor purchases stake in one bank. But those that invest in two or more banks are exempt from such restrictions.
By Park Ga-young (email@example.com)