Kasikornbank (KBank) is to buy a major stake in Indonesia-based PT Bank Maspion Indonesia Tbk to strengthen its regional banking business.
According to the bank's statement to the Stock Exchange of Thailand yesterday, the bank's wholly owned subsidiary Kasikorn Vision Financial Company Pte (KVF) has entered into a conditional sale and purchase agreement to become a major shareholder in Indonesia-based PT Bank Maspion.
KVF will conduct a transaction with an investment fund not exceeding US$220 million or 7.55 billion baht.
After the transaction's completion, KBank and KVF will altogether hold not less than 67.5% in the Indonesian bank.
The deal is expected to be completed by the end of this year, according to its statement to the SET.
According to KBank's separate release, the first step is share acquisition whereby KVF will buy 30.01% of Bank Maspion's shares, which will increase KBank Group's shareholding to 40% from the 9.99% stake that the bank has held since 2017.
Then, KVF will purchase additional shares (rights issue) in order to increase the shareholding of KBank Group in Bank Maspion to 67.5%, and will increase Bank Maspion's minimum capital to $210 million.
The acquisition of Bank Maspion will allow KBank to conduct commercial banking business in Indonesia at a lower investment value than applying for a new licence (minimum capital requirement of $700 million), giving KBank the opportunity for a higher return on investment.
This is also the right time to expand KBank's business, as public infrastructure development and the digitalisation drive in Indonesia both support the promising outlook for financial services in all customer segments along with an economic rebound anticipated in the post-Covid era.
In addition, this move is in line with KBank's key growth strategy to become a truly regional bank and connect businesses across the AEC, China, Japan and South Korea (AEC+3).
The acquisition of Bank Maspion, a local bank with the potential and strength to reach local small and micro businesses, is in line with KBank's expertise in supporting small and micro businesses to strengthen such enterprises' business capabilities in Indonesia.
With the Asean+3 strategy, the bank aims to expand international business in Asean markets, as well as China, Japan and South Korea. For Asean markets, KBank has a presence in Cambodia, Laos, Myanmar, Vietnam and Indonesia.
Beside KBank, local large banks have been searching for greater business opportunities in regional markets in accordance with high growth potential of the Asean economy.
Bangkok Bank acquired Indonesia's Bank Permata in 2020 worth $2.28 billion or 73.7 billion baht holding a major share-stake at 89.1%.
