Korean banking group considers insurer buyout to address inefficiency

Regional lenders are looking to become a comprehensive financial institution

Korean banking group considers insurer buyout to address inefficiency

Insurance News

By Kenneth Araullo

BNK Financial Group is considering the purchase of an insurance company to become a comprehensive financial institution, as well as address inefficiencies in the banking system.

BNK Financial Group chief executive officer Bin Dae-in, who took the post a month ago, said that the group is incomplete as it lacked the insurance part that forms a comprehensive financial institution. The group is the holding company behind Busan Bank and Kyongnam Bank, two of South Korea’s regional lenders.

“We are paying attention to smaller, Internet-based insurance companies or even offshore insurers because we don’t have the adequate level of capital to buy a large-scale insurer,” he said in a report from Pulse News Korea.

Bin also said that the group will make efforts to benefit from keeping both the Busan and Kyongnam Bank separate. He said that the focus should instead be on improving the overall efficiency of the system, a gap that could be filled by insurance.

Elsewhere in the country, the new accounting rule of IFRS17 has sent the shares of Korean insurance companies upwards due to expectations of higher profits and reassessed corporate value.

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