Woori Bank will inject $100 million into its Indonesian subsidiary to bolster its capital base and groom it to be one of the top five lenders in the Southeast Asian country.

According to multiple sources from the financial industry on June 28, PT Bank Woori Saudara received approval from the Indonesian financial authority on its plan to increase its capital by $100 million. The lender will finalize the plan in July after receiving approval from shareholders.

The capital increase will be funded through a share buyback scheme.

An unnamed Woori Bank official said that the lender plans to enhance local retail operations including those of pensions, credit loans, and high-grade corporate loans from the second half of this year after the capital increase. The move comes as part of efforts to further promote the growth potential of its business in Indonesia that has the fourth-largest population in the world and make it the gateway to branch out to other Southeast Asian markets, the official added.

The capital will also be invested in promoting new businesses including local credit card operations.

Financial industry sources note that Woori Bank’s plan to increase capital is aimed at boosting domestic operations after its Indonesian entity merged with Saudara Bank in 2014. Woori Bank acquired Indonesia’s Bank Himpunan Saudara as part of a merger that was approved by the financial authority in December 2013.

Bank Woori Saudara is currently Indonesia’s 42nd largest lender among 115 commercial banks based on total asset. It managed 144 network branches as of May. After the capital increase, Bank Woori Saudara plans to expand the network to 152 branches by the end of this year. The bank raised $21 million in net profit as of end of last year, up 50 percent from $14 million at the time of the merger.

Woori Bank has been aggressively expanding its business in Indonesia through its local subsidiary. It has signed a business agreement with Hanwha Life Insurance to provide so-called bancassurance or insurance policies sold at banks to financial consumers from this month on top of expanding private bank operations. The lender also plans to offer its mobile bank service WiBee Bank from July.

With officials from Bank Indonesia and Otoritas Jasa Keuangan, or the Financial Services Authority of Indonesia, attending, Woori Bank held a ceremony marking a merger in Indonesia on Feb. 26 and announced the official launch of a merged bank. The official name of the merged bank is Bank Woori Saudara. The bank has total assets worth US$1.6 billion (1.76 trillion won) and employs about 2,000 workers. Woori Bank will have a 74 percent stake in the merged bank. 

Woori Bank CEO Lee Kwang-goo said, “We are here to declare that both banks have successfully completed the merger and have a new beginning together. Even though we have different backgrounds and cultures, let’s lay the foundations of the merged bank’s growth in the future through the integration of the two banks.”

He added, “With continuous investment and support, we will grow Bank Woori Saudara into a medium and large-sized bank, contributing to the development of the financial industry and the economic development in Indonesia.”

Through the merger, Woori Bank will have 185 networks in 18 countries.

Meanwhile, Woori Bank CEO Lee also signed an agreement with Bank Central Asia (BCA), the largest commercial bank in Indonesia, to join the interbank payment network of debit cards (Prima).

Joining the Prima, which accounts for 50 percent of the Indonesian ATM market with 51 local bank members, the customers banking with Bank Woori Saudara can now use nearly 15,000 ATMs of the BCA.