The Industrial Bank of Korea is looking to acquire an Indonesian bank, as part of its long-term strategy to become a bigger player in Asia.
The Industrial Bank of Korea (IBK) is a state-run lender, which focuses on corporate lending for small and medium-sized companies (SME's).
The Ministry of Strategy and Finance holds a 51.8 percent stake in the IBK and the rest is held by two state-run policy banks, Korea Development Bank and the Export-Import Bank of Korea.
«Indonesia is the only country where IBK does not have a branch, since it is impossible to establish a local subsidiary in Indonesia, an M&A with a local bank is the only way to enter the market,» said Kim Do-jin, Chief Executive Officer of the IBK.
Not An Easy Task
Acquiring a bank in Indonesia is no easy task and can be a political minefield as Singapore's leading bank DBS found out.
In 2013 DBS ended its bid for PT Bank Danamon in Indonesia, after the proposed transaction languished for over a year waiting for approval from Indonesia’s financial regulators.
Pushing South For Growth
Speaking at a press conference in Seoul, the CEO said the M&A process had commenced but could not elaborate on details.
IBK originally had a branch in Indonesia but withdrew following the devastating Asian financial crisis.
The bank is also pushing ahead with expansion plans in Vietnam and Cambodia, where Korean companies have built significant manufacturing capabilities.
