이 기사는 2021년 11월 04일 07:52 thebell 에 표출된 기사입니다.

Competition between KB Financial Group and Shinhan Financial Group to secure South Korea’s leading banking group status is set to expand into the domestic non-life insurance industry after Shinhan Financial decided to acquire BNP Paribas Cardif General Insurance.

Shinhan Financial has signed a stock purchase agreement with France-based BNP Paribas Group to acquire BNP Parbias Cardif General Insurance, said industry sources on Tuesday. Through the deal, the Korean banking group will hold a 94.54% stake in the non-life insurer, putting together the last piece of the puzzle to complete its business portfolio, which ranges from banking to credit financing, life insurance, securities, and trust bank operations.

Rival KB Financial has already completed its business portfolio to become a comprehensive financial group through a series of mergers and acquisitions. It acquired Woori Financial, currently KB Capital, in 2014 and LIG Insurance, currently KB Insurance, in 2015.

KB Financial and Shinhan Financial have since focused on supplementing its weaknesses. KB Financial took over Hyundai Securities and merged it with KB Securities. Last year, it purchased Prudential Life Insurance of Korea, while holding KB Life Insurance, to become an insurance giant.

Shinhan Financial acquired Orange Life and merged it with Shinhan Life Insurance in 2019. The financial group acquired venture capital firm Neoflux last year, but the gap between the two has remained unchanged. As of the end of September this year, KB Financial had 650.5 trillion won ($550.5 billion) in assets while Shinhan Financial had 638.7 trillion won.

KB Financial overtook Shinhan Financial to secure the leading banking group status by generating a net income of 3.78 trillion won during the first nine months of this year. Shinhan Financial posted a net income of 3.56 trillion won during the same period.

However, the two financial groups are showing mixed performances when comparing major subsidiaries. KB Kookmin Bank recorded 2.2 trillion won in net income during the first nine months of this year, beating Shinhan Bank’s 2.1 trillion won. This was because KB Koomin Bank had significantly larger amount of won-denominated loans of 311.8 trillion won compared to Shinhan Bank’s 263.7 trillion won.

KB Securities delivered 543.3 billion won in net income during the first three quarters of this year, the second-largest among the group’s affiliates. Shinhan Investment & Securities posted 367.5 billion won in net income during the same period.

In contrast, Shinan Card posted 538.7 billion won in net profit during the first nine months, cementing the number one position in the domestic credit card industry. Shinhan Card is Shinhan Financial’s flagship non-banking unit. KB Kookmin Card delivered 374.1 billion won in net income during the same period.

Meanwhile, Shinhan Capital generated 208.9 billion won in net income thanks to its solid corporate and investment financing business, while KB Capital posted 170.4 billion won during the first nine months.

The two financial conglomerates have been actively making M&As in the life insurance industry in recent years. Shinhan Life, which was launched following a merger of Orange Life and Shinhan Life Insurance, recorded a net income of 401.9 billion won during the first nine months. KB Financial’s Prudential Life recorded a net income of 255.6 billion won while KB Life Insurance posted a net loss of 18.1 billion won.

KB Financial, however, clearly has the upper hand in the nation’s non-life insurance sector. KB Insurance is among the country's top four non-life insurers, along with Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and DB Insurance. KB Insurance recorded a net income of 269.2 billion won in the first three quarters while Shinhan Financial hasn’t operated non-life insurance business for nearly 20 years.

BNP Paribas Cardif General Insurance, which is set to be acquired by Shinhan Financial, recorded an operating loss of 11.9 billion won and a net loss of 11.7 billion won in 2020.

Shinhan Financial aims to make BNP Paribas Cardif General Insurance a digital non-life insurer. The group plans to utilize its existing strengths such as a B2B2C-oriented partnership business model and stable asset management strategy, while providing support such as promoting collaboration with digital startups.

Shinhan Financial is expected to actively seek additional acquisition opportunities in the non-life insurance sector while operating its non-life insurance business through BNP Paribas Cardif General Insurance.

Insurance companies are also likely to benefit from a possible hike in the nation’s benchmark interest rate as the rate hike will improve the investment returns of insurers. (Reporting by Jang-jun Lee)