KB Financial Group has secured approval from Indonesia's OJK to establish a local financial holding company, allowing it to consolidate its Indonesian affiliates under one intermediate structure and prepare for broader expansion in the market. The approval came about 14 months after the group first filed its plan in June last year, following a request from OJK in December for revisions and supplements and a resubmission in early March. The move responds to Indonesia's 2023 Financial Sector Development Law, which requires certain financial groups to set up local holding companies. Under the approved structure, KB Financial will convert KB Data System Indonesia, its local IT subsidiary, into the holding company rather than create a new entity, aiming to cut the time and cost of the reorganization. The restructuring will bring six businesses under one umbrella, including KB Bank Indonesia, securities, insurance, consumer finance and asset management units, while Kookmin Bank plans to transfer its 66.88% stake in KB Bank Indonesia to the local financial holding company. The ownership restructuring must be completed by August 2027. The approval also comes as KB Bank narrows losses, grows operating revenue and expands local corporate finance activity, including syndicated loans for blue-chip borrowers. A remaining variable is the stake held by Stick Eugene Star Holdings, which has a put option exercisable through late May next year to sell all or part of its holdings back to Kookmin Bank.