KB Kookmin Bank said on Sunday that it has received final approval to merge its two affiliates in Cambodia ― Prasac Microfinance and Kookmin Bank Cambodia ― on Friday.

This announcement came after the bank sought the green light from Cambodian authorities to merge its two affiliates and launch a new commercial bank, KB Prasac Bank, in early 2022.

Preliminary approval for this new commercial bank was granted July 16.

In 2009, KB Kookmin Bank made its initial entry into the Cambodian market with the establishment of Kookmin Bank Cambodia.

The Korean lender then expanded further in 2020 by acquiring a 70 percent stake in Prasac Microfinance, a microfinance deposit-taking institution that focuses on small-scale lending.

KB Kookmin Bank completed its full acquisition of Prasac Microfinance in October 2021, making it a wholly owned subsidiary.

As of the end of last year, the microfinance deposit-taking institution was the second-most-profitable among all financial institutions in Cambodia. It reported total revenue of 2.5 trillion riels ($609.36 million) and a profit after tax amounting to 740.87 billion riels.

Additionally, it secured the fourth position in terms of assets among all financial institutions in Cambodia, with assets exceeding 19.75 trillion riels.

"Using market catch-up strategies such as securing low-cost deposits, entering the QR payment market and expanding SME (small and medium-sized enterprises) loans, our goal is to narrow the gap with the top banks. In the long term, we plan to incorporate KB's advanced digital capabilities into the Cambodian financial market, positioning ourselves as a leader in the industry,” Cho Nam-hoon, chief global strategy officer at KB Financial Group, said in a statement.

KB Kookmin Bank also plans to gradually broaden Prasac Microfinance’s business scope to include corporate clients as well, extending beyond its current retail financial services.

Currently, ABA Bank is Cambodia's largest commercial bank. As​ of​ December​ 2022,​ the​ top bank​ managed​ $​9​ billion​ in​ total​ assets​.