The state-run Industrial Bank of Korea (IBK) has started the countdown to the establishment of its Indonesian subsidiary “IBK Indonesia.”
The bank is expected to complete the merger process between the two Indonesian banks, which were acquired at the end of last year, by July 31. After the merger, IBK Indonesia will focus on giving out loans to smaller firms just as IBK specializes in lending to small and medium-sized enterprises (SMEs) in Korea.
The bank submitted the document on the merger of the two banks to Indonesia’s stock exchange in the middle of this month, according to banking industry sources and local media on April 29.
The two Indonesian banks are all listed banks with their main offices located in Jakarta. Agris Bank has 23 branches across the country, while Mitraniaga Bank owns 13. In particular, Agris Bank holds a foreign exchange business license despite its small size. Therefore, it can support exportation and importation of South Korean SMEs operating in Indonesia. The local media said that the IBK has also marked small business loans as its core business in the document recently submitted to the local stock exchange.
A spokesperson from the IBK said, “We aim to complete the merger process in the first half of the year but it may take longer depending on when the approval comes from the Indonesian authorities.”