KB-Shinhan to battle for KRW 3 trillion worth ING Life Insurance… ‘Leading bank’ competition again
Hwang Byung Seo | BShwang@` | 2018-03-13 10:06:45

KB Financial Group and Shinhan Financial Group, which are competing in the leading bank, are adding to ING Life Insurance`s succession. In particular, the two financial stakeholders are planning to expand their non-banking business to strengthen their position as a leading bank, which is expected to spark a confrontation over the acquisition of ING Life Insurance.

According to the banking and investment banking industry on March 12, Shinhan Financial Group has entered into a preliminary inspection for merger and acquisition (ING) merger and acquisition (M & A), and KB Financial Group also plans to acquire insurers including ING Life.

When Shinhan Financial Group initiated a due diligence process to acquire ING Life, KB Financial is in full swing in M & A work.

On the day, the Korea Exchange requested KB Financial Group to disclose inquiries based on ING Life Insurance takeover. In response, a KB Financial Group official said, "We are reviewing all of the ING Life Insurance products in various aspects," he said. "It is not a step to set up a specific insurance company, but it is open to all possibilities."

In the case of insurance industry, Shinhan Financial Group and KB Financial Korea, the largest financial companies in Korea, are considering the insurance market to be hot due to the purchase of ING Life.

Meanwhile, ING Life is the fifth-largest insurer in the industry with an asset size of KRW 31 trillion and a net profit of KRW 340 billion last year. Especially, asset quality is strong thanks to asset-liability management in line with global standards.

ING Life is attractive because Shinhan Life Insurance, a subsidiary of Shinhan Financial Group, is the top 10 life insurance company (asset size KRW 29 trillion). When Shinhan Financial Group merges with ING Life, it is the industry`s evaluation that it is possible to see even the fourth place in NH4NongHyuh Life Insurance. Shinhan Financial Group, which posted a net profit for KB Financial Group last year, is evaluating it as an opportunity to have a rehearsal. If KB Life Insurance (KBFG) (9 trillion won) and ING Life are merged, KBFG will be able to rise to the top of the industry with an asset size of over 40 trillion won. KB Financial Group acquired LIG Insurance (current KB Non-life Insurance) and has quickly gained 4th place in the non-life insurance industry. As a result, Shinhan Financial Group has recovered its `Leading Financial Holding Company` by raising its record-high earnings of KRW3.3 trillion last year.

The problem is price. KBFG reviewed ING Life`s acquisition four years ago, but the price gap was too large to give up. It is an industry assessment that ING Life`s ransom is soaring to KRW 3 trillion. Both KBFG and Shinhan Financial Group are "too expensive".

A financial stakeholder said, "The uncertainty is growing as the new accounting standard is applied, so we are cautious about M & A." It is true that M & A is a necessary situation, but it is also burdensome to speed up immediately. "

By Hwang Byung Seo BShwang@`

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