KB Kookmin Bank headquarters in western Seoul (KB Kookmin Bank)
South Korea’s KB Kookmin Bank said Oct. 20 that it has acquired the remaining stake in Prasac Microfinance Institution, to wholly own Cambodia’s largest microfinance deposit-taking firm.
KB Kookmin had acquired a 70 percent stake in Prasac Microfinance for $603.4 million from Sri Lanka-based nonbanking lender LOLC Holdings in April 2020, becoming the majority shareholder of the institution.
The price of the 30 percent stake that KB Kookmin recently acquired has yet to be disclosed.
The Korean commercial bank’s latest move has made Prasac Microfinance a wholly owned subsidiary of KB Kookmin.
Prasac Microfinance is Cambodia’s No. 1 microfinance deposit-taking institution, accounting for a market share of 44.6 percent in Cambodia with 180 branches. It reported an annual net profit of $109 million last year, gaining 5 percent on-year.
Despite COVID-19 woes, Prasac Microfinance was named the largest profit-maker among the Korean financial institutions’ overseas businesses in the first half of this year, according to corporate tracker CEO Score earlier this month. The Cambodian microfinance business reported a net profit of 90.6 billion won ($76.9 million) in the cited period, clinching No. 1 among the businesses’ overseas subsidiaries in terms of profit. Shinhan Bank Vietnam ranked No. 2 with 58.5 billion won in the same period.
Cambodia was the Korean financial firms’ most profitable overseas market in the first six months of the year, CEO Score noted, raking in a combined net profit of 142.2 billion won. Vietnam followed with 104.4 billion won in the same period, but other key Southeast Asian markets Indonesia and Myanmar each reported a combined 47.7 billion won and 16.4 billion in the red, respectively.
“We plan to expand Prasac Microfinance’s portfolio for transition into a commercial bank and plan to add KB Kookmin’s strengths in the process,” a KB Kookmin official said.
“Prasac Microfinance will eventually become KB Kookmin’s core hub in fostering Southeast Asian businesses,” the official added.
By Jung Min-kyung (email@example.com)