Tuesday, July 07, 2020

KBank eyes expansion in Indonesia

Apr 15. 2020
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In a move to reinforce itself as a regional digital bank, Kasikornbank will expand its presence in Indonesia by boosting its holding in PT Bank Maspion Indonesia Tbk (Bank Maspion) to 40 per cent from 9.99 per cent.

The total investment in Bank Maspion will not exceed US$130 million (Bt4.24 billion). KBank's acquisition of additional shares in Bank Maspion has been approved by the Bank of Thailand and is in the process of being approved by Indonesia's financial business supervisory agency, Otoritas Jasa Keuangan (OJK), which should be finalised mid this year.

The move aims to adopt digital innovations to provide services for local clients while also linking with Thai and foreign businesses and strengthening trade and investment connectivity within the CCLMVI bloc (China, Cambodia, Laos, Myanmar, Vietnam and Indonesia).

Pattarapong Kanhasuwan, KBank executive vice president and chair of the Kasikorn Vision Co Ltd (KVision), said his firm signed an agreement to acquire additional Bank Maspion shares on April 13 and bring the company’s holding up to 40 per cent – the highest threshold set by OJK under bank ownership rules in Indonesia.

Bank Maspion has an extensive branch network covering major cities and is part of a top conglomerate in Indonesia with an established relationship with various businesses.

Moreover, its management has visions that are consistent with KBank's strategic directions. After working with Bank Maspion for more than two years, KBank found that Indonesia offers significant opportunities for businesses thanks to its large and promising market in Asean.

Following the asset-light business model, KBank will focus on its expertise in products and services, while investing in digital banking development to capitalise on the changing behaviour of consumers, who are increasingly embracing digital banking services. The two banks also hope to leverage their strengths to meet the following demands:

Corporate customer segment

Support will be given to Thai and international companies investing in Indonesia, including local conglomerates in Indonesia, via products and services that meet customers' needs, namely loans and cash management services, while also developing internet banking channels and payroll products to offer consumers greater convenience and diverse services via digital channels.

SME customer segment:

Focus will be placed on offering loans to SMEs by using data lending and formula lending model to enhance efficiency and reduce the cost of lending along with expanding merchant acquiring business to facilitate non-cash payment.

Retail customer segment

The existing mobile banking system will be improved while secured loan products, such as home and personal loans, will be promoted along with the development of data analytic lending platform via data obtained from merchant acquiring business.

KBank's investment in Bank Maspion will be made via KVision – Kbank’s 100 per cent owned investment holding company.

Related story:

KBank gets approval for stake in Myanmar bank

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