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KIS acquires Indonesian brokerage for 40 billion won

Dec 13,2017
Korea Investment and Securities (KIS) acquired Danpac Sekuritas in Indonesia on Tuesday in a 40 billion won ($37 million) bid to expand its presence overseas.

The Korean brokerage signed an agreement in Jakarta, Indonesia’s capital, to purchase a controlling 75 percent stake in Danpac as part of its strategy to strengthen its overseas business. So far, a vast majority of the company’s profit has come from Korea.

Korea Investment and Securities plans to convert Danpac into its Indonesian branch next year after the country’s regulatory authorities approve the move.

If all goes as planned, the company plans to provide brokerage services for Indonesian clients by the first half of next year.

In a press release, Korea Investment and Securities said it would focus on establishing an online home trading system in the beginning phase.

Danpac is a midsize company that specializes in securities and bond trading services. It has about 6.2 billion won in capital and posted an average 3 billion won in annual operating profit for the past four years. Its return on equity stood at 14.9 percent this year.

In Southeast Asia, the brokerage runs a branch in Vietnam.

Yoo Sang-ho, chief executive of Korea Investment and Securities, expressed confidence in the deal based on the Korean brokerage’s past experience in Vietnam.

“In 2010, we acquired a midsize Vietnamese firm that ranked 50th at the time and turned it into one of the country’s top 10 brokerages after five years,” Yoo said. “We also plan to enter the top 10 in Indonesia based on the experience and strategies learned in Vietnam.”

Along with the overseas expansion, Korea Investment and Securities is hoping to enter more lucrative sectors in Korea, including financial planning and corporate finance.

Last month, the brokerage became the first Korean securities company to issue promissory notes to corporations.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]