Kakao Bank to acquire 10% stake in Indonesian digital bank
Kakao Bank, the banking arm of Korean mobile giant Kakao, announced Tuesday that it will acquire a 10 percent stake in PT Super Bank Indonesia, aiming to boost its presence in the Southeast Asian market.
The acquisition will be Kakao Bank's first investment outside of Korea, and will be done in collaboration with the Singapore-based ride-hailing and food delivery app, Grab.
A consortium led by Grab and Singapore-based global telecom company, Singtel, is the largest shareholder of PT Super Bank Indonesia.
According to sources, despite the acquisition, the consortium will retain its position as the largest shareholder at 46.9 percent, while Singtel will hold 18.8 percent and Grab will maintain 28.1 percent ownership.
Kakao Bank will become the third-largest shareholder, trailing Indonesia's leading media company, Emtek, which will hold a 36.8 percent stake.
The specific amount of Kakao Bank's investment remains undisclosed.
In addition to the investment, Kakao Bank and PT Super Bank Indonesia plan to collaborate on developing new services and lending and deposit products. They will also work together to design a new user interface and user experience.
Kakao Bank said it hopes the collaboration will help it better understand the Southeast Asian market and strengthen its global capabilities.
"As Kakao Bank gains attention in the global market as a successful model for future banking, we will seek diverse opportunities to secure our mid to long-term growth drive," Kakao Bank CEO Yoon Ho-young said in a statement.
Kakao Bank further explained that it decided to invest in PT Super Bank Indonesia because it sees potential in the Indonesian market, which has a large population of mobile phone users.
Indonesia has over 270 million people, making it the fourth-largest country in the world. However, nearly half of the population over the age of 15 does not have a bank account due to a lack of local branches across the country's more than 18,000 islands.
PT Super Bank Indonesia CEO Tigor M. Siahaan on Tuesday welcomed Kakao Bank's investment decision, saying, "Through this partnership, we expect to increase accessibility to digital finance for the financially underprivileged in Indonesia."
Meanwhile, Kakao Bank and Grab are also seeking various ways to enhance user convenience by linking their services.