Indonesia joins Cambodia, Myanmar and Vietnam in the group’s regional network
Overseas earnings rose 16.3% in the first half as JB Financial diversifies its profit base
JB Financial Group is expanding its Southeast Asian business into Indonesia, with electric vehicle finance set to become a key part of its strategy in the country.
Rather than simply adding another overseas subsidiary, the Korean financial group plans to combine an existing local finance platform with JB Woori Capital’s lending expertise and mobility data from a fintech partner. Electric motorcycle financing is expected to be one of the first areas of focus.
The move follows regulatory approval from Indonesia’s Financial Services Authority, or OJK, for a change in the controlling shareholder of PT KB Bukopin Finance.
JB Woori Capital, a subsidiary of JB Financial Group, signed an agreement in July last year to acquire an 85% stake in KB Bukopin Finance for about 29 billion won ($21 million) from PT Bank KB Indonesia Tbk, the Indonesian banking unit of KB Kookmin Bank.
The approval clears a major regulatory hurdle for the transaction.
Local Platform First, New Business Next
Established in 1983, KB Bukopin Finance operates from its headquarters in Jakarta and eight business locations across Indonesia. Its main businesses include corporate and working-capital finance.
The company had total assets of about 92.8 billion won and net income of roughly 1.5 billion won at the end of last year.
The size of the acquisition is relatively modest. For JB Financial, however, the deal provides something that would take considerably longer to build from scratch: a licensed local financial platform with an existing customer base and distribution network.
JB Woori Capital can then bring in capabilities developed through its auto finance, corporate lending and risk management businesses in Korea.
What happens after the acquisition may therefore be more important than the acquisition itself.
JB Financial plans to complete an equity investment in the Indonesian unit of AI-based fintech company AIZEN Global and work with the company to develop new financial services. AIZEN Global has been building an EV finance business in Indonesia using mobility data and has accumulated financing records covering more than 17,000 EVs.
Electric motorcycles are expected to be an early target.
Financing for electric motorcycle purchases and batteries, along with credit products for riders, are among the businesses being considered. This would broaden KB Bukopin Finance’s existing vehicle and corporate finance operations into retail lending.
Under the model, JB Woori Capital could provide lending and risk management expertise while mobility data from AIZEN Global could be used in areas such as credit assessment.
It is a different approach from simply exporting Korean financial products to another country. The aim is to build products around Indonesia’s own transportation market and consumer behavior.
Overseas Business Takes a Bigger Share of Earnings
JB Financial’s expansion comes as its overseas operations are beginning to make a larger contribution to group earnings.
The group’s global businesses generated a combined profit of 32.1 billion won in the first half of this year, up 16.3% from a year earlier. Their share of total group earnings increased from 7.3% to 8.1%.
The overseas operations are still small compared with JB Financial’s domestic banking businesses, but their contribution has been gradually increasing.
JB Financial posted first-half net income attributable to controlling shareholders of 385.7 billion won, up 4.1% from a year earlier. Combined net income at Jeonbuk Bank and Kwangju Bank, meanwhile, declined to 241.2 billion won from 265 billion won during the same period.
The contrasting figures show why businesses outside the group’s two regional banks are becoming increasingly important to its earnings mix.
JB Financial already has operations in Cambodia, Myanmar and Vietnam, spanning banking, asset management, microfinance and securities. Indonesia will add another major Southeast Asian market to that network.
But the strategy is becoming less about the number of countries on the map and more about finding businesses that can generate sustainable earnings in each market.
In Indonesia, JB Financial is betting on auto and EV finance. By combining an established local finance company with JB Woori Capital’s lending capabilities and fintech-driven mobility data, the group is trying to build a business suited to a market where motorcycles play a central role in everyday transportation.
Once the acquisition is completed, the focus will shift from regulatory approval to execution. The pace at which JB Financial can expand its electric motorcycle and mobility finance businesses will help determine how quickly Indonesia develops into another meaningful overseas earnings base for the group.
