By Choi Ji-won | The Korea Herald | April 24, 2024
Korean life insurer secures 40% stake in Jakarta-based Nobu Bank
Hanwha Life, a leading Korean insurance company and the life insurance subsidiary of Hanwha Group, has made a strategic move into the Indonesian banking sector through a stake investment.
The company announced on Wednesday that its board had approved securing a 40 percent stake in Nobu Bank from Indonesia’s Lippo Group, marking the first entry of a Korean insurer into the Indonesian banking industry. The decision was made during an extraordinary board meeting held on Tuesday.
Hanwha Life’s expansion into the Indonesian banking sector marks a key step in its strategy to evolve from an insurer into a global financial conglomerate. By establishing Indonesia as its regional base, Hanwha Life aims to widen its reach throughout Southeast Asia.
Nobu Bank, founded in 1990, is one of Indonesia’s top 30 commercial banks, with assets totaling 2.3 trillion won ($1.67 billion) as of last year. It is affiliated with Lippo Group, Indonesia’s sixth-largest conglomerate with businesses spanning finance, real estate and retail.
The lender has a solid reputation in the Indonesian banking industry, specializing in personal mortgage loans and working capital loans for small and medium enterprises. Its extensive branch network has contributed to its strong capital adequacy and growth, even during challenging times like the pandemic, Hanwha Life noted.
Through this investment, the life insurer plans to establish a mobile-based business environment by leveraging the digital mobile expertise of Hanwha Group’s financial affiliates.
The insurer also expects to create synergy by utilizing the bancassurance channel for the sales of life insurance products from its Indonesian subsidiary and general insurance products from Lippo General Insurance, in which it acquired stakes last March.
Yeo Seung-Joo, vice chair and CEO of Hanwha Life, remarked, “By investing in Nobu Bank, we are taking a significant step toward becoming a global financial group,” and added, “We expect Indonesia to become a key hub for our strategic expansion into the Southeast Asian market.”
An essential figure in securing the share investment has been Hanwha Life’s Chief Global Officer and President Kim Dong-won, the second son of Hanwha Group Chairman Kim Seung-youn.
Since taking office in February last year, President Kim has played a crucial role in driving Hanwha Life’s global expansion.
His extensive network was instrumental in laying the groundwork for the investment in Nobu Bank. According to Hanwha Life, the key discussion that led to the investment occurred at the Davos Forum in January, where he met with Lippo Group CEO John Riady to explore potential partnerships.
Hanwha Life noted that Kim and Riady have maintained a close relationship since their initial meeting at the Davos Forum in 2016. This ongoing connection significantly contributed to Hanwha Life’s entry into the Indonesian banking sector, marking a new phase in the company’s global expansion plans.
The share investment will be finalized once both parties sign the contract and receive approval from the regulatory authorities in their respective countries.