South Korea’s KB Kookmin Bank plans to take a controlling stake in Bank Bukopin, Indonesia’s Financial Services Authority (OJK) said in a statement, noting the mid-sized lender needed to strengthen its capital and liquidity.
OJK said it backed the plan but it still needed to meet regulatory requirements. The regulator did not provide financial details or specify whether Kookmin would acquire the stake from existing shareholders or if Bukopin would issue new shares.
CNBC Indonesia reported Bukopin was discussing a potential rights issue with its major shareholders, including Indonesian conglomerate Bosowa and Kookmin, to strengthen its capital.
Bosowa is the bank’s biggest shareholder with a 23.4% stake, while Kookmin is currently the second largest with a 22% stake, according to Bukopin’s website.
Kookmin and Bosowa could not immediately be reached for comment.
A spokeswoman for Bukopin said the bank was awaiting the OJK’s decision on the issue.
Bukopin booked a net profit of 53.7 billion rupiah ($3.64 million) in the first quarter, down 2% from the same period a year earlier. It managed total assets of 100.8 trillion rupiah ($6.83 billion) as of end-March.