South Korean lender KB Kookmin Bank has injected cash into Indonesia's Bank Bukopin as part of a process to take a controlling stake, a Bukopin director said in a statement on Thursday, amid a cash crunch at the Jakarta-based lender.
The move shows KB Kookmin Bank's commitment to the acquisition, which is awaiting approval from banking regulators in Jakarta and Seoul, Adhi Brahmantya, Bukopin's director of operations said in the statement.
Bukopin said in a stock exchange filing earlier this week it had negative cashflow due to a drop in overall savings, but it was working to increase retail deposits.
Some of its customers told Reuters the bank had lowered their daily withdrawal limit this week.
Bukopin is due to hold a rights issue this month. KB Kookmin Bank - part of KB Financial Group - is currently Bukopin's second largest shareholder with a 22% stake, after Indonesian conglomerate Bosowa with a 23.4% stake.
Bosowa could not be reached for comment.
Earlier on Thursday, Indonesia's banking regulator, the Financial Services Authority (OJK), said Kookmin has set aside an undisclosed amount of funds in an escrow account as it moves to increase its stake.
However, an official at KB Kookmin Bank in Seoul told Reuters ahead of Bukopin's statement: "We are currently working on the process to acquire the majority stake in Bank Bukopin in Indonesia, but we are not currently in a rush to complete the process."
Bukopin's non-performing loan ratio was 5.3%, according to its first quarter report. Its total asset was 100.8 trillion rupiah ($7.23 billion).
(Reporting by Tabita Diela in Jakarta and Heekyong Yang in Seoul; Editing by Gayatri Suroyo and Kirsten Donovan)