Kookmin Card acquires Cambodian leasing firm at $5.2 mn

KB Kookmin Card, a credit card unit of KB Financial Group, and its Cambodian local subsidiary KB Daehan Specialized Bank, acquired the Southeast Asian nation's local leasing company I-Finance Leasing (IFL), the company said on Thursday.

KB Kookmin and KB Daehan paid 6.45 billion won ($5.2 million) to IFL to make it a 100%-owned subsidiary. They will strengthen the capital base of IFL, by injecting an additional 45.5 billion won ($3.67 million) into IFL's rights offerings in the first quarter.

KB Kookmin Card has been seeking growth momentum in Cambodia as they vow to weather gloomy forecasts in the Korean market whose growth potential is deemed limited, and the latest acquisition will open the way for KB Daehan Specialized Bank to expand its business scope into the lease market.

It set up KB Daehan in 2018, which has since provided new and used car installment financing, real estate mortgage loans, and credit card services.

It grew as the top credit financing company in the country in just five years.

KB Kookmin Card signed a share purchase agreement (SPA) with KB Daehan Specialized Bank late last year to jointly acquire an IFL stake and has waited for approval from local financial authorities.

Established in 2014, IFL is a mid-tier leasing company with total assets of $12.5 million and equity capital of $2.15 million as of the end of 2021. 

With operations in four provinces, it provides financing services for the purchase of motorcycles, cars, and trucks for individuals and business owners.

This year, IFL will focus on diversifying its service offerings to motorcycles, automobiles, and agricultural machine leases this year.

In the mid-to-long term, KB Kookmin Card plans to integrate IFL into KB Daehan to increase its grip on the local credit financing market. Once the two companies are combined, they can not only provide installment financing and lease products as a one-stop service but also expand their sales networks across Cambodia. 

Write to Nan-Sae Bin at binthere@hankyung.com