KB Financial Goup Korea Continues To Strengthen Commitment To Bank KB Bukopin Through The Rights Issue Plan

Photo: Doc. KB Bukopin

JAKARTA - A Financial Giant Company from Korea, KB Financial Group continues to strengthen its commitment to PT Bank KB Bukopin, Tbk (KB Bukopin) with additional capital through a rights issue that has received shareholder approval at the Extraordinary General Meeting of Shareholders (EGMS) at the KB Bukopin Headquarters, on November 30, 2022.

Founded in 1963, KB Financial Group is Korea's largest financial business group with total assets of US$560.1 billion and a customer base that reaches 70 percent of the Korean population. Having the highest credit rating among Korean banks, KB Financial Group is also known as the most profitable, solid, and stable financial business entity.

The addition of KB Bukopin's capital is planned to be carried out through a Limited Public Offering (PUT VII) with the Pre-emptive Rights (HMTED) scheme or rights issue by issuing a new share of series B of up to 120 billion shares.

Deputy President Director of KB Bukopin, Robby Mondong said that the corporate action was an effort by KB Bukopin to maintain capital adequacy according to regulations and support sustainable business expansion.

"In order to maintain a healthy and strong competitiveness in the national and regional financial industries. So that it can provide added value to both shareholders, employees, management, and to wider stakeholders," Robby said in his statement, quoted Monday, December 1.

The minimum capital fulfillment adequacy Ratio (CAR) for the KB Bukopin position in September 2022 is 17.59 percent (unaudited), which is in accordance with the provisions of PSAK 71.

In accordance with Bukopin's KB strategy, to grow stronger and more sustainable, additional capital is needed to encourage business growth and increase contributions to national economic growth.

In accordance with the Disclosure of Information that was published by KB Bukopin on October 24, 2022, PUT VII is planned to issue new shares, namely ordinary Class B shares with a maximum of 120,000,000,000 (one hundred and twenty billion) shares.

The number of shares to be issued depends on the needs of KB Bukopin funds and the price of the implementation of PUT VII. With the addition of a new capital structure, KB Bukopin is increasingly ready and optimistic in competing in the National financial industry services.

Bukopin's next target is to remain consistent in business development, especially in the SME and Retail segments, as well as support from the development of IT digitization, so in the medium term it is hoped that business growth will increasingly lead to a stable direction to achieve sustainable profitability.

Previously, KB Bukopin had actually started realizing the goal of becoming a bank that was free from bad loans and became a clean bank. KB Bukopin at the end of June 2022 has carried out Non-Performing Loan (NPL) sales transactions and risk loans (Loan at Risk / LAR) totaling 180 debtors with an Original Principal Balance (OPB) value of IDR 4.14 trillion.

The profitability ratio is also expected to continue to show improvement in line with quality new credit growth where until June 2022 new credit growth reached more than IDR 2.4 trillion.

The main drivers of new credit growth came from the Commercial and Retail segments with a contribution of 42 percent and 39 percent, respectively, while in the MSME segment credit growth was 19 percent.

The Commercial Segment is still the anchor of business growth, optimizing partnerships from Korean business links and the Indo-Korean business link will continue to be intensified by KB Bukopin.