Home News South Korea’s KDB Eyes Tifa Finance Shares

South Korea’s KDB Eyes Tifa Finance Shares

Korea Development Bank (KDB) is seeking to acquire Indonesia's PT Tifa Finance Tbk (IDX: TIFA) - Photo by the Company

JAKARTA (TheInsiderStories) Korea Development Bank (KDB) is seeking to acquire PT Tifa Finance Tbk (IDX: TIFA) shares, Korea Times reported. TheInsiderStories try to confirm the rumored but the financial company’ president director Bernard Thien deny to comment.

Based on the report, the lender has looked an opportunities to diversify its portfolio in the Southeast Asia region, targeting financial companies that have a licens. This is also part of KDB’ efforts to look beyond Korea’ crowded financial market where commercial and policy banks are facing difficulties in generating positive cash flow amid low interest rates.

Established in 1989, Tifa Finance is located in Jakarta and offers a wide range of financial services, including leasing and consumer financing. With total assets of about US$116.8 million, the firm posted a Rp2.4 billion won net profit last year. Its expected to cost about 10 billion won (Rp846.74 billion) to acquire the firm’ rights.

The KDB is considered to be a latecomer in the Southeast Asian financial market. Apart from its office in Hong Kong, KDB operates offices in Bangkok, Ho Chi Minh City, Yangon and Manila. It set up an office in Indonesia in February, 2019.

Leasing companies directly run a number of strategies to spur financing in the second semester of 2019 after poor performance in the first semester (1H), said the players. Chief executive at Financial Service Agency Riswinandi has reported at the end of 1H of 2019 multi finance industry receivables grew around 4.29 percent, missed the initial targets grow in the range of 7 – 8 percent for the whole year.

That condition, he explained, was caused by a number of things, including the consolidation of a number of finance companies and the ability of a number of multi-finance businesses and ultimately no longer operate.

On the other hand, he explained, the impact of the sluggish market of the motor vehicle also affected the distribution of the finance companies. Even so, Riswinandi admitted that the growth space for financing industry players was considered still open in the second semester of 2019.

The potential, he explained, was apparent from the industry’ low gearing ratio and also the non-performing finance ratio which was maintained at around 2.82 percent. Gearing ratio is the ratio between the number of loans and the company’s own capital.

Indonesian multi-finance companies mostly offer loans to retail and corporate customers with difficulties in securing capital from commercial banks. The country’ largest multi-finance company’ accounts for only an 8 percent market share, according to an industry source.

Won1: Rp11.81

by Linda Silaen, Email: linda.silaen@theinsiderstories.com