Seoul: Woori Financial Group Inc. has received regulatory approval for the acquisition of two life insurance companies, contingent upon the group's commitment to enhancing its internal control measures. The approval, granted by the Financial Services Commission (FSC), allows Woori Financial to proceed with the takeovers of Tongyang Life Insurance Co. and ABL Life Insurance Co., amounting to a total of 1.54 trillion won (US$1.07 billion). This strategic move is expected to broaden Woori Financial's business portfolio significantly.
According to Yonhap News Agency, Woori Financial finalized agreements in August to acquire a 75.34 percent stake in Tongyang Life for 1.28 trillion won and a full acquisition of ABL Life for 265 billion won. Tongyang Life, the sixth-largest life insurer in South Korea, boasted assets worth 33 trillion won in 2023, while ABL Life, ranking ninth, held assets amounting to 17 trillion won.
The FSC's assessment revealed that Woori Financial's management did not fully satisfy regulatory standards. Consequently, the approval is contingent upon the group's adherence to its proposed steps for improving internal control. Woori Financial is tasked with bolstering the capital bases of both insurers and must provide semi-annual updates on the implementation of its plans to the financial regulator through 2027.
The FSC retains the authority to mandate Woori Financial to divest its interests in the two insurers if the banking group fails to fulfill its commitments concerning internal control improvements and capital enhancement. With this approval, Woori Financial aims to lessen its reliance on its banking operations, which currently account for approximately 90 percent of its revenue, primarily generated by its flagship entity, Woori Bank.