KBank keen to buy Indonesian banks

The regulations require foreign banks to buy more than one bank, and that the targets must not be strong institutions.

KBank president Pipit Aneaknithi said yesterday that the bank currently had partnerships with two banks in Indonesia, and was prepared in terms of facilities and capital to establish its own footprint in the Indonesian market.

While Indonesia has very high potential for KBank and the takeover of local banks is an option, the requirement that foreign banks have to purchase more than one bank is something that it might not be particularly comfortable with, he said.

The Bank of Thailand acknowledges this concern, he said, adding that market entry via the Qualified Asean Banks (QAB) scheme is another potential solution for KBank.

The bank is therefore interested in applying for QAB status if the scheme’s framework is implemented.

Meanwhile, the establishment of a physical branch in Indonesia is likely to be more difficult than doing so in Vietnam, which is another focus country for KBank, the president said.

The best solution right now for KBank is therefore seen as the continued partnership with two local banks in Indonesia, he explained.

Elsewhere in Asean, KBank currently has physical branches in two markets, one each in Cambodia and Laos.

The Cambodian branch will be officially opened on February 8, with the Vientiane branch in Laos due to be opened later this year.

With the presence of a physical branch in a foreign market not always the best solution, and the cost of establishing such an operation today a major matter, partnering with local banks is a tangible way to conduct business, he said.

However, the difficulty is whether the bank and its partners have the same policy direction and share a similar interest in accommodating clients, he added.