LINE Corporation, through its subsidiary LINE Financial Asia, will acquire a 20 percent stake in lender Bank KEB Hana Indonesia to expand digital banking services in Southeast Asia`s largest economy, the Japan-headquartered messaging giant said in a statement on Sunday. (Reuters Photo/Toru Hanai)
LINE Corporation, through its subsidiary LINE Financial Asia, will acquire a 20 percent stake in lender Bank KEB Hana Indonesia to expand digital banking services in Southeast Asia`s largest economy, the Japan-headquartered messaging giant said in a statement on Sunday.
A signing ceremony was held in Seoul on Oct. 26, the company said in the statement, adding that executives from both firms sought closer cooperation to make them become leaders in the digital finance market in Indonesia and Asia.
LINE said the acquisition would be carried out through a share subscription agreement and that the deal was currently pending approval from Indonesian financial authorities. Still, the messaging giant said it was upbeat that it may launch its new digital banking service in the country by next year.
Bank KEB Hana is controlled by South Korea`s Hana Financial Group - one of the East Asian country`s largest bank holding companies. The deal will see LINE Financial Asia becoming the second-largest shareholder in the Indonesian lender.
"Through this partnership with Bank KEB Hana, we will launch easy-to-use and innovative banking services in Indonesia," LINE Financial Asia chief executive Hwang In-joon said in the statement.
"This agreement is an important step toward becoming a leader in mobile banking and expanding our fintech services," he said.
LINE, which is one of the most popular messaging platforms in Indonesia, said it was keen to add digital banking services to its broad range of content and services for Indonesian users.
The messaging giant said with a population of 260 million people in a country of more than 18,000 islands, "Indonesia lacks banking services that can cover the entire country."
It added that, the deal was expected to improve LINE Financial Asia`s positioning in the archipelago, as well as globally, as it looks to become a major fintech and digital banking provider.
Indonesia also has more than 100 million smartphone users and a very high rate of social media engagement, which present a huge potential market for digital banking services.
Bank KEB Hana president director Lee Hwa-soo said he believes "LINE`s advanced digital technology and KEB Hana Bank`s retail banking experience will prove to be the future of the banking industry, demonstrating a new financial model that begins in Indonesia."
Bank KEB Hana meanwhile expects the deal to provide it with access to LINE`s large userbase, which presents huge opportunities for acquiring customers, while the lender also expects to increase its product portfolio and expand its retail banking services, to boost the volume of low-interest deposits and retail customer numbers.
With LINE coming up as the second-largest owner of the lender, Bank KEB Hana expects to improve its digital marketing capabilities through the messaging giant`s brand power, technology, content and expertise. Both companies are "also looking to create deposit/microcredit products, and remittance and payment services for Indonesia."
Bank KEB Hana also expects assistance from its future investors to implement and improve credit rating models through projects with local as well as international credit rating agencies. The bank also plans to create an electronic identity verification process, known as e-KYC, that can be optimized for local regulations, among other measures.
"With LINE expanding its fintech operations in Indonesia, the company is currently on the lookout for global talent to join us, with positions open in such areas as business development, service planning and management. Details of the available positions and applications can be found on LINE`s careers page," it said. https://jakartaglobe.id/business/line-acquire-20-stake-bank-keb-hana-expand-fintech-services-indonesia/
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