KB finishes payment for Prasac stake purchase
KB finishes payment for Prasac stake purchase
Seoul-headquartered KB Kookmin Bank (KB) on Friday finished paying $603.4 million for a 70 per cent stake in Prasac Microfinance Institution Ltd (Prasac) and plans to buy the remaining stake, the latter said in an announcement on Monday.The purchase allows KB to include Prasac – the Kingdom’s largest microfinance deposit-taking institution (MDI) in term of total assets – in its subsidiary.
KB said it plans to buy the remaining 30 per cent stake in Prasac two years after the transaction and finalise the acquisition, local Korean-language News Briefing Cambodia reported in February.
It announced the purchase of the stake from Sri Lankan-based non-banking lender LOLC Holdings Plc in December, which received approval from the National Bank of Cambodia on January 29.
Prasac president and CEO Sim Senacheert said KB’s investment in Prasac reflects a surge in confidence among foreign investors in Cambodia and the 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.
At the end of last year, it reached $3.11 billion in total assets, had a loan portfolio of $2.50 billion with more than 417,000 borrowers, attained a non-performing loan ratio 0.4 percentage points lower than market levels, and had a deposit balance of $1.78 billion with more than 742,000 accounts, he said.
“The achievements of Prasac come from the strong support from clients, regulatory bodies and local authorities, as well as the dedication of Prasac management and staff to our strategy, including the delivery of diversified products and services, building a staff culture of growing together, and taking advantage of changing market conditions.
“With KB’s investment, Prasac will have more sophisticated products including digital financial technology and enhanced banking experiences to respond to customer needs for both existing and new market segments especially small and medium enterprises,” he said.
KB president and CEO Hur Yin said the bank’s acquisition of Prasac will serve as a watershed for KB Kookmin’s expansion of its retail banking network in Asia, which is part of its global strategy.
“With long-term plans to turn Prasac into a commercial bank, we hope to develop it into a leading bank by transferring KB’s strong retail capabilities and make it a base to conduct business in Southeast Asia,” he said.
