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Daegu Bank to acquire Cambodian bank in 1st overseas deal

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Daegu Bank to acquire Cambodian bank in 1st overseas deal

South Korea's Daegu Bank Ltd. is acquiring Cambodia-based Cam Capital Specialized Bank for 71.58 billion South Korean won (US$63.3 million) in its first overseas M&A deal.

The DGB Financial Group Co. Ltd. unit's board approved the acquisition Oct. 17 and will sign an agreement Oct. 19.

Daegu Bank expects to complete the proposed deal in the first quarter of 2018, Shin Il-kyu, a general manager of the bank's strategy department, told S&P Global Market Intelligence. The deal is subject to approval from regulators in both South Korea and Cambodia.

Cam Capital Specialized Bank operates five branches in Cambodia with about 260 staff. As of Dec. 31, 2016, the bank held total assets of 103.96 billion won and recorded net income of 4.10 billion won for the same year.

The Cambodian bank can only provide loans and does not operate deposits and foreign-currency-related businesses, Shin said.

"[The Cambodian acquisition] is the first overseas M&A for us," Shin said. "We believe that the Cambodian bank will take a role as a forward base of DGB Financial Group for the Southeast Asian region down the road."

Overseas, Daegu Bank currently operates a branch in Shanghai and an office in Ho Chi Minh City.

As of Oct. 17, US$1 was equivalent to 1,130.70 South Korean won.