South Korean lender KB Kookmin Bank has injected cash into Bank Bukopin as part of a process to take a controlling stake, amid a cash crunch at the bank. In a statement last week, KB Kookmin Bank is currently awaiting approval from banking regulations in Jakarta and Seoul for proceeding with the acquisition.
Earlier, Indonesia's Financial Services Authority (OJK), said Kookmin has set aside an undisclosed amount of funds in an escrow account as it moves to increase its stake. The move shows KB Kookmin Bank's commitment to the acquisition.
Part of KB Financial Group, one of the biggest lender in South Korea, KB Kookmin Bank is Bukopin's second-largest shareholder with total shares of 22%, after Indonesian conglomerate Bosowa with 23.4% of shares.
Bank Bukopin's shares fell 4.07% to Rp165 on Wednesday (10/6), amid the circulation of rumors that Bank Bukopin is experiencing a liquidity shortage. The bank is now struggling financially during this COVID-19 pandemic.
Bukopin's non-performing loan ratio was 5.3%, according to its first-quarter report. Its total asset was Rp100.8 trillion ($7.23 billion).
In a stock filing last week, the bank mentioned it had negative cash flow due to a drop in overall savings, but it was working to increase retail deposits.
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