Industrial Bank of Korea will acquire an 82.59% stake in Indonesia-based PT Bank Agris Tbk under a recently signed conditional sale and purchase agreement with PT Dian Intan Perkasa, the Asia Economic Daily reported on Feb. 6.
If the deal is approved by the shareholders of both parties to the contract, it will be the first foreign bank acquisition by Industrial Bank of Korea or any other South Korean policy bank.
Industrial Bank of Korea has been looking for a bank to buy in Indonesia since 2015 as part of its globalization effort. Bank Agris' currency trading license is one of the reasons why it is seeking to buy its operations.
Industrial Bank of Korea plans to buy another Indonesian bank to merge with Bank Agris. Under Indonesian law, foreign investors can buy two local banks and merge them into one to control a stake greater than the statutory 40% ownership limit.
Shinhan Financial Group Co. Ltd. unit Shinhan Bank Co. Ltd. executed this market entry strategy and established PT Bank Shinhan Indonesia in 2016.
Industrial Bank of Korea's move into Indonesia also marks the first banking deal since South Korean President Moon Jae-in unveiled the "New Southern Policy," which aims to deepen economic engagement with ASEAN countries, during his state visit to Indonesia in November 2017.
