Shinhan Card Now a Major Shareholder of an Indonesian Company
One of South Korea's major financial services firm, Shinhan Card, will acquire more than 50% shares of Swadharma Indotama Finance to become the Indonesian company's biggest shareholder.
According to CEO and President Wi Sung-ho on Thursday, Shinhan Card's acquisition of the multi-financing company - which offers corporate loans - will mean full management and control. It will also involve taking the top position.
A senior employee from Shinhan said on the phone that Swadharma shares are owned by subsidiaries, and Korea's financial firm will own major shares. The interview has revealed that the reason Salim Group sold the subsidiary to Shinhan is Indomobil, an automobile maker.
"With Shinhan's management of the company, the group ultimately wants to run car leasing deals", the employee stated.
Shinhan Card held a board meeting on August 21 for the acquisition's approval. Then, its officials will organize a signing ceremony in Indonesia on August 26 to mark the companies' partnership. After financial regulators from the two countries (South Korea and Indonesia) give their approval in September, the joint venture will launch in November.
The plan to acquire major shares in Swadharma has been processed since last year. It has also planned to expand further in Indonesia.
"The acquisition is aimed at maximizing synergies between Shinhan Card's 30 years of credit card business know-how and Salim Group's nationwide retail networks", according to the company's spokesperson.
Salim Group encompasses automobiles, mining energy, food, leasing and telecommunications companies. Salim Food is the biggest food manufacturing business in Indonesia.
While Shinhan considers operating a credit card business in other nations risky because there isn't enough data on the locals' credit ratings, it is still planning to do so. In fact, it is the first card company from Korea to open a branch in Kazakhstan. It also plans to open a branch in Indonesia as well as in 16 other countries where Shinhan Bank - its sister company - has branches.
According to a 2013 report by KB Financial Group, several foreign financial firms are already operating in Indonesia, and many of these businesses specialize in installation loans - over 30 out of 198 financial institutions. Around two-thirds are Japanese, considering the country's partnership with plenty of automakers from Japan.
