OK Financial Group is set to sign a definitive contract for the acquisition of Yebul Insurance. Its vision of expanding its business scope into insurance, following savings banks and capital companies, and leaping forward as a comprehensive financial group has drawn closer to reality.
According to financial industry sources on the 7th, OK Next, an affiliate of OK Financial, and the Korea Deposit Insurance Corporation (KDIC) are scheduled to sign a share purchase agreement (SPA) for the sale of Yebul Insurance as early as that day. This comes approximately three months after OK Next was selected as the preferred bidder in July 2024.
The two parties plan to proceed with follow-up procedures necessary to close the transaction, including approval from the Financial Services Commission for a change of major shareholder. KDIC will execute funding support under the contract, while OK Next plans to complete the acquisition of Yebul Insurance through payment of the purchase price and transfer of shares.
Yebul Insurance is a bridge insurance company established with 100% capital contribution from KDIC to resolve MG Insurance, which had been designated as a distressed financial institution. Since September last year, it has taken over insurance contracts and assets from MG Insurance, performing contract maintenance and management as well as insurance payout operations.
If the acquisition is finalized, OK Financial will add insurance as a new pillar to its business structure centered on savings banks and capital companies. It is expected that this will broaden its revenue base through insurance premium income and asset management. Attention is focused on whether the experience of acquiring a distressed savings bank and growing it into OK Savings Bank can be replicated in normalizing an insurance company.
However, approval from financial authorities for a change of major shareholder remains a hurdle before the final acquisition. Post-acquisition tasks include capital expansion, improvement of the solvency ratio, and restoration of the business foundation to achieve operational normalization.
Previously, Shim Sang-don, CEO of OK Next, stated in an interview with Money Today that he plans to conduct a capital increase in the first year following the acquisition of Yebul Insurance. He explained that by investing only in capital during the first year, the company can meet the K-ICS (Korean Insurance Capital Standard) 130% benchmark for the stabilization period of three to five years.
Subsequently, OK Financial is also considering an additional capital increase of 200 billion to 300 billion won, depending on the growth pace of Yebul Insurance.
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