Life insurer advances broader finance ambitions with planned purchase of Korea’s leading savings bank
Kyobo Life Insurance has moved closer to completing its acquisition of SBI Savings Bank after securing regulatory approval, strengthening its push to broaden its portfolio and advance into a comprehensive financial group.
The company said Wednesday that it had received approval from the Financial Services Commission for a change in the bank’s major shareholder. Kyobo now plans to complete its acquisition of a 50 percent plus one share stake in SBI Savings Bank, which will make it the lender’s largest shareholder.
The acquisition is part of Kyobo Life’s agreement with Japan’s SBI Group, a long-time partner, to purchase roughly 900 billion won ($605 million) worth of shares in SBI Savings Bank. Kyobo acquired an initial 8.5 percent stake in May and plans to take over the remaining 41.5 percent plus one share as early as the first half of this year.
Excluding treasury shares, the completed transaction will give Kyobo Life 58.7 percent of the bank’s voting rights.
The insurer plans to keep SBI Savings Bank’s current management structure in place for the time being after the acquisition.
Kyobo said the deal would give it an asset base and sales network comparable to those of a regional banking franchise. SBI Savings Bank is Korea’s largest savings bank, with total assets of 14.6 trillion won as of the third quarter of last year.
"It is significant because it marks our entry into banking, the core of the financial industry," a Kyobo Life official said. "Securing a deposit-taking function we did not previously have is especially meaningful. SBI is similar in scale to a regional bank, but unlike regional lenders, it can operate nationwide, creating significant synergies."
The local authorities are currently pushing for measures to allow large savings banks with total assets of 20 trillion won or more to convert into regional banks or internet-only banks, while capping major shareholders’ ownership at around 50 percent. SBI Savings Bank is widely seen as one of the institutions best placed to benefit from such regulatory changes, given its asset size, business infrastructure and ownership structure.
Kyobo Life said it plans to actively pursue synergies between insurance and savings banking, with a particular focus on expanding productive finance through lower-rate loans for self-employed borrowers and small and medium-sized enterprises.
With the two companies’ apps serving a combined 4.6 million users, the deal is also expected to strengthen their presence in digital services and broaden their reach among younger customers.
"By combining Kyobo Life’s insurance capabilities with SBI Savings Bank’s infrastructure, which is on par with that of a regional bank, we have built a differentiated financial portfolio," a company official said. "Drawing on the strengths of both companies, we will further enhance financial services tailored to customers throughout their life cycles."
Meanwhile, the latest move adds another layer to the partnership between Kyobo Life and SBI Group, which dates back to 2007, when the two companies formed a strategic alliance. The pair once explored launching an internet-only bank together while seeking opportunities in broader digital finance. More recently, they have been discussing cooperation in digital assets.
jwc@heraldcorp.com
