Korea Development Bank (KDB) has purchased a majority stake of 80.65% in Tifa Finance, a multi-finance company in Indonesia. KDB is a state-owned bank established in 1954 for the purpose of supplying capital to help develop Korean industries and the national economy. Tifa Finance focuses on corporate lease finance, which accounts for 77% of its business. Its other businesses include sharia-compliant finance (18%) and consumer finance (1%). It has six offices in Jakarta, Semarang, Surabaya, Balikpapan, Pekanbaru and Makassar.
Ultimately, KDB plans to combine the Indonesian company’s business with its own specialties, ranging from corporate, infrastructure development and venture finance.
KDB signaled its intention to acquire Tifa Finance last year, as part of its overseas expansion plans amidst low-interest rates in the Korean market which makes it challenging for banks to generate positive cash flow. Prior to the acquisition, KDB operated in Indonesia through PT KDB Daewoo Securities, which was taken over by Mirae Asset Securities. KDB also opened a representative office in Jakarta in February 2019.
(Sources: Business Korea; The Insider Stories)
