Home > Business > Finance

Woori Financial set to acquire Tongyang Life, ABL Life after FSC's conditional approval

Published: 02 May. 2025, 20:28 Updated: 04 May. 2025, 17:13

Pictured is Woori Financial Group's office in Jung District, central Seoul, on March 17. [YONHAP]

Woori Financial Group is set to acquire Tongyang Life Insurance and ABL Life Insurance, completing the process by early July after navigating several hurdles.

The Financial Services Commission (FSC) conditionally approved the group’s plan to bring the two life insurers under its wing during a regular meeting on Friday.

The approval comes with stipulations. Woori Financial must faithfully implement its proposed plans to improve internal controls and manage capital in the medium to long term.

The company must report its progress to the Financial Supervisory Service (FSS) every six months through the end of 2027. The FSS will, in turn, review the progress and submit annual reports to the FSC.

Woori Financial signed a stock purchase agreement in August last year to acquire the two insurers and submitted an application for regulatory approval in January.

However, the review process faced uncertainty after a routine inspection uncovered large-scale improper lending at Woori Bank, resulting in the group receiving a third-grade rating in its management evaluation.

Under current supervisory regulations, financial holding companies must receive a second-grade rating or higher to obtain approval for subsidiary acquisitions.

An exception exists, however: if the FSC determines that shortcomings can be offset through capital increases or the disposal of nonperforming assets, the management can still be deemed sound.

The FSC said its approval was based on several factors. Woori Financial addressed 17 of the 21 improvement measures ordered by regulators last year and submitted detailed plans for the remaining four. The group also pledged to invest 100 billion won ($70.9 million) over the next five years to strengthen its internal control systems and plans to reduce risk-weighted assets by selling real estate holdings and equity stakes.

The group also aims to raise its Common Equity Tier 1 (CET1) ratio — an indicator of financial soundness — from 12.42 percent as of the end of the first quarter to over 13 percent by the end of 2027. A higher CET1 ratio signals stronger financial health and greater capacity for shareholder returns.

“With robust internal controls and stable capital management, we aim to transform Tongyang and ABL Life into sound and innovative insurers,” a Woori Financial official said. “By enhancing capital soundness and expanding group-wide synergy, we will grow into a comprehensive financial group that earns the trust of both regulators and the market.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM KYUNG-HEE [[email protected]]