Nonghyup to cash up non-bank unitsNonghyup Financial Group plans to beef up its non-banking sector by increasing the amount of capital poured into three of its affiliates in October to transform the newly launched group into one of the nation’s leading financial players, its chairman Shin Dong-kyun said yesterday.
The affiliates in question comprise a life insurer, a non-life insurance firm and a capital financing company.
“Nonghyup can only be competitive if we secure a decent capital adequacy ratio?to stay on par with our rivals,” Shin said in a press conference yesterday. “To make that happen, we urgently need to increase the capital of our life, non-life insurance and capital units to strengthen their capital bases.”
Shin, the former chairman of the Korea Federation of Banks, said he will consider raising the capital of the group’s banking and securities interests at a later date.
He said that while Nonghyup Bank and Nonghyup Life Insurance rank fourth and sixth in their respective markets, other sectors, including the group’s securities unit, are performing poorly.
Nonghyup, which is also known as the National Agricultural Cooperatives Federation (NACF), underwent a major reshuffle this year by separating into an agro-focused holding company and the financial group.
Nonghyup Financial Group launched with assets of 240 trillion won ($211.14 billion) in March with seven affiliates under its wing, including the banking unit. Shin joined the group in June. The group’s goal is to increase its total assets to 420 trillion won by 2020, he said.
When it was spun off from NACF in March, the group ambitiously set its profit target for this year at around 1 trillion won, but Shin said it may not be able to meet that goal, citing its rising loan-loss reserves and deepening woes stemming from the euro zone fiscal crisis.
When asked about potential M&A deals to acquire car insurance firms in order to jump into the automobile insurance business, Shin said he may pursue takeovers in the long term.
By Kim Mi-ju [email@example.com]
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