This article was published on ChosunBiz MoneyMove (MM) site at 4:35 p.m. Oct. 17, 2025.
KB Kookmin Bank will consider securing additional equity in its Indonesian unit KB Bank (formerly Bank Bukopin). This comes as the call option exercise period for the equity held by a consortium of domestic private equity firms Stick Credit and Eugene Private Equity (PE) has arrived.
According to the investment banking industry on the 17th, KB Kookmin Bank's call option exercise period runs for six months from midthis month through April next year. Considering typical credit investment interest rates, the call option exercise amount is expected to exceed 350 billion won.
KB Bank raised about 1 trillion won in funding in May 2023. At that time, the Stick Credit consortium used a project fund called "Stick-Eugene Star Holdings" to acquire 31.9 billion shares of KB Bank for 3.19 trillion rupiah (about 280 billion won at the time). That represented about a 17% equity stake.
At the time, KB Kookmin Bank and the Stick Credit consortium included a call option clause in the shareholders' agreement allowing the purchase of financial investors' shares during a six-month period starting 2 years and 6 months after acquiring the equity. If KB Kookmin Bank does not exercise the call option, Stick Credit can exercise a put option on KB Kookmin Bank within one year after the call option exercise period ends.
KB Kookmin Bank is likely to weigh whether to exercise the call option because KB Bank has accumulated large losses and internal control risks since being acquired, which would affect the decision. After KB Bank was acquired by KB Kookmin Bank, it recorded losses of about 1.5 trillion won, weighing on group revenue, and an unauthorized transfer incident occurred last month, raising internal control risks. Earlier this year, the Financial Supervisory Service (FSS) pointed out that risk assessments were inadequate in the process of providing funds to the Indonesian unit during a regular inspection.
However, industry insiders say it is highly likely KB Kookmin Bank will ultimately repurchase the FI's equity. If it forgoes exercising the call option, investors immediately gain the right to exercise the put option. In that case, the burden of acquiring the equity would inevitably increase because it would include a spread on top of the benchmark rate.
KB Bank's recent moves to revise its business strategy and cut expenses, improving profitability, also strengthen the likelihood of exercising the call option. KB Bank changed its business strategy by cleaning up nonperforming SME loans identified as the cause of losses and is improving profitability through restructuring and other measures. As of the first half of this year, it returned to profit with about 31.5 billion won in net income.
An industry source said, "It is only a matter of time before Kookmin Bank repurchases the equity held by the financial investor," adding, "Given that KB Bank has escaped chronic losses and succeeded in returning to profit, it is highly likely the bank will secure the equity during the call option exercise period."