이 기사는 2021년 11월 03일 07:52 thebell 에 표출된 기사입니다.

The decades-long strategic partnership between South Korea's Shinhan Financial Group and France's BNP Paribas Group may be coming to an end.

Shinhan Financial said on Monday that it has signed a stock purchase agreement with the French banking group on Friday to buy a 94.54% stake in BNP Paribas Cardif General Insurance to enter the domestic non-life insurance market. The remaining stake is owned by Shinhan Life.

“BNP Paribas Cardif General Insurance is a member of the General Insurance Association of Korea and it hasn’t been active in sales as it has only about 70 employees, excluding insurance planners,” said an industry source. “Shinhan Financial took over the firm to secure a non-life insurance business license, while BNP Paribas Cardif General Insurance will also be able to gain competitiveness if it launches products under Shinhan Financial brand.”

The strategic ties between Shinhan Financial and BNP Paribas began in December 2001, when BNP Paribas acquired a 4% stake in Shinhan Financial. The French banking group, which once was the second-largest shareholder of Shinhan Financial with a 9.4% stake, has cut its stake to 3.5% as of the end of 2020.

A BNP Paribas official has been present in Shinhan Financial’s boardroom since the start of their strategic partnership. However, rumors started to circulate over the relationship between the two firms as Shinhan Financial has yet to appoint a successor to Philippe Avril, a non-executive director on the board of Shinhan Financial, whose term ended in March.

BNP Paribas also sold its entire 35% stake in Shinhan BNP Paribas Asset Management earlier this year. Shinhan Financial turned the 65:35 joint venture created by the two into its wholly-owned subsidiary and changed the name to Shinhan Asset Management.

The partnership between the French and Korean banking groups has further weakened after the former’s latest decision to sell its stake in BNP Paribas Cardif General Insurance to Shinhan Financial. The years-long ties between the two groups will practically come to an end if the French banking group offloads its stake in Shinhan Financial.

“A growing number of western financial firms are trying to exit the Korean market due to tighter regulations and fierce competition,” said an industry source.

“It seems that the deal satisfied the needs of both parties. BNP Paribas reduced exposure to the Korean market, while Shinhan Financial strengthened its business portfolio.” (Reporting by Jang-jun Lee)