South Korea’s KB Kookmin Bank, New York-listed KB Financial Group Inc’s (KB) commercial banking unit, on October 20 announced the completion of the acquisition the remaining 30 per cent interest in Prasac, Cambodia’s largest microfinance institution, as it expands its business into the Kingdom’s financial industry.
In August, KB said it had paid $322 million for the remaining 30 per cent stake (90 million shares) after it acquired a 70 per cent stake for $603.4 million from Sri Lankan-based non-banking lender LOLC Holdings in April last year.
“We plan to expand Prasac Microfinances’ portfolio for transition into a commercial bank and plan to add KB Kookmin’s strengths in the process,” a KB Kookmin official said, as quoted by the Korea Herald.
“Prasac Microfinance will eventually become KB Kookmin’s core hub in fostering ASEAN businesses.”
In a filing to the US Securities and Exchange Commission in August, KB said it owned 299,999,999 shares, representing 99.99 per cent of Prasac’s total number of shares issued.
One share, among the 90 million, was to be held by Kookmin Bank Cambodia Plc, the subsidiary in the Kingdom of KB Kookmin Bank.
Prasac received approval from the National Bank of Cambodia on January 29, 2020 to sell the 70 per cent stake to KB.
Prasac president and CEO Sim Senacheert previously said KB’s investment in Prasac reflects a surge in confidence among foreign investors in Cambodia and the microfinance deposit taking institution (MDI).
“Prasac management and staff would like to warmly welcome our new shareholder, KB Kookmin Bank, to drive Prasac to become more effective and efficient in the expansion of financial inclusion in Cambodia,” said Senacheert.
He said Prasac stands as a market leader with the largest operational network among MDIs, strong financial returns, and a proven record of sustainable growth in its loan portfolio and deposit balances.
Prasac recently reported that it attained $68.47 million in net profit in the January-June period, compared to $37.37 million in the corresponding period last year.
In mid-June, Prasac said it had increased its registered share capital to $300 million from $230 million to achieve a sound financial position to gain the public’s confidence.
On May 5 last year, Prasac listed a corporate bond on the Cambodia Securities Exchange, allocating 1,272,000 shares in the public offering, with a total issue amount of 127.2 billion riel ($31 million).
As of June 30, Prasac’s total assets, gross loan portfolio, deposit balance and shareholder’s equity amounted to $3.83 billion (up 14.23 per cent year-on-year), $3.35 billion, $2.32 billion and $587 million, respectively.