Woori Bank has agreed to purchase Cambodia s microfinance institution Malis Finance for 5 billion secured ($4.9 million) to speed up its global expansion.
The Financial Services Commission sanctioned Woori Bank s purchase of Malis on Wednesday, according to bank officials.
The acquisition of the Cambodia-based firm marks the bank s second effort at making inroads into the Southeast Asian country after its failure in 2008 because of the global financial crisis.
One high-ranking Woori Bank official said, It s difficult to develop a (stable) business model in Cambodia due to its low levels of economic development, so we ve decided to first gain more expertise in the market by trying our hand in the microfinancing business and gradually move onto banking .
The deal still requires to pass screening by Cambodian regulators to gain their approval before it can be finalized, according to Woori Bank spokespeople.
They said that they anticipated obtaining the green light in the second half of the year.
Malis Finance is one of the 35 microfinance institutions in Cambodia that provides support for lower-income customers.
The company was formed in 2011 with registered capital of $2.25 million, of which its 88.89 percent is shared by Korean-American investor Cho Sung-jae. About 1.11 percent is owned by Dongkwang Pharmaceutical Company in South Korea.
Woori s purchase of Malis is seen as part of its effort to speed up global business expansion. Previously this month, Woori launched the first South Korean bank in Dubai and intends to launch more branches in the Middle East and Africa.
Woori in May obtained final approval to purchase Indonesia s Bank Saudara. The merger between the two banks is to be finalized within this year.