The Korea Herald


KB Securities seeks approval to acquire Indonesian brokerage firm

By Son Ji-hyoung

Published : Aug. 27, 2021 - 14:56

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A logo of KB Financial Group A logo of KB Financial Group
South Korean banking giant KB Financial Group is ramping up its push to venture into the Indonesian financial industry, as its securities brokerage arm awaits a regulatory approval to set foot in the largest economy in Southeast Asia.

KB Securities, a Seoul-based investment bank and brokerage house, said Friday it is poised to inject some 50 billion won ($42.8 million) in capital to become a new shareholder of an undisclosed midsized Indonesian firm dedicated to securities underwriting and broker-dealer business.

An agreement on the stake transfer and private placement of new shares to KB Securities has been reached, and the deal now requires approval from Otoritas Jasa Keuangan, the financial authority in Indonesia, according to Korea’s third-largest brokerage house by assets.

Korean wire service Yonhap, without detailing sources, raised the possibility that KB Securities is targeting Jakarta-based Valbury Sekuritas Indonesia, a key affiliate of Valbury Group, which is owned by currency exchange service firm Gading Dana Lestari. KB Securities declined to comment on the matter.

KB Securities currently operates overseas units in the United States, Hong Kong and Vietnam.

The deal would add momentum to KB Financial Group’s entry into the Indonesian financial services market.

So far, five KB Financial Group affiliates -- KB Kookmin Bank, KB Insurance, KB Kookmin Card, KB Capital and KB Data Systems -- have Indonesian units.

In the latest move, KB Kookmin Bank, Korea’s largest commercial bank by total assets, raised its ownership in Bank KB Bukopin to 67 percent this year. The Korean bank’s board of directors has also greenlighted a plan to inject up to 400 billion won of equity capital in the Indonesian commercial bank earlier in August, in a bid to ramp up its response efforts.

Also in July 2020, the group’s credit finance arm KB Kookmin Card acquired an 80 percent stake in Financia Multi Finance, an Indonesian consumer finance firm.

Meanwhile, KB Securities is expected to become the sixth Korean brokerage house to enter the Indonesian market, following Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, Shinhan Investment and Kiwoom Securities. The five companies generated a combined $13.3 million in net income in 2020, according to the Financial Supervisory Service.