Korean credit card issuer acquires Indonesian firm
Woori Card, a South Korean credit card issuer, announced on June 26 that the Indonesian financial authority had approved its acquisition of PT Batavia Prosperindo Finance Tbk (BPFI).
Woori Card struck a stock purchase agreement of the Indonesian outfit in March and gained the green light from the Financial Services Authority of the Southeast Asian country.
Based on the M&A, Woori Card is expected to expand its business in Indonesia.
Founded in 1994, BPFI works on investment financing and other financing business activities. Included in its business focuses are automobiles and heavy equipment.
Its multi-purpose financing products are designed to meet the needs of such customer goods as motorcycle ownership, education costs, home supplies, and building materials.
Based on a total asset of some $92 million and 1,100 employees, the outfit operates more than 70 branch offices across Indonesia.
Woori Card, affiliated with South Korea’s major banking group Woori, said that the entity would conclude the acquisition during the third quarter of this year.
Through such efforts, Woori Card vies to tap into the potential-rich Indonesian market and diversify its global business portfolio.
“On the back of our know-how over installment loans, we plan to launch new auto lease programs with competitive interest rates,” a Woori Card official said.
This marks Woori Card’s second overseas branch. After gaining the nod of the Myanmar government to run the microfinance business in 2016, the firm set up Tutu Finance Myanmar.
Observers point out that Korean card companies would stage stiff rivalry in Southeast Asian countries.
“A set of Korean card issuers waded into the Southeast Asian nations whose people are friendly to Korean corporations,” Kiwoom Securities analyst Seo Young-soo said. “Close competition is inevitable during them.”
On top of Woori Card, for example, such players as Shinhan Card, KB Kookmin Card, and Lotte Card established subsidiaries in Southeast Asian countries.