By Hyeong-Gyo Seo | The Korea Economic Daily | April 24, 2024
Korea’s second-largest insurer will buy a 40% stake in Nobu Bank to tap into the Southeast Asian banking industry
South Korea’s second-largest insurer Hanwha Life Insurance Co., with 109 trillion won ($79.4 billion) in total assets as of end-September 2023, said on Wednesday it will buy shares in a banking unit of Indonesian conglomerate Lippo Group to expand its business in Southeast Asia, which is experiencing strong economic growth with fast-growing middle-class populations.
Hanwha Life is set to buy a 40% stake in Lippo’s Bank Nationalnobu Tbk PT, or Nobu Bank, listed on the Indonesia Stock Exchange. The details of the purchase plan were not disclosed.
The deal comes more than a year after Hanwha Life and its non-life insurance affiliate in March 2023 bought a combined 62.6% stake in Lippo General Insurance, another unit of the Indonesian conglomerate and the 14th-largest non-life insurer in the Southeast Asian country.
It is essential for the Korean insurer to accelerate global expansion for sustainable growth beyond the domestic market, said Hanwha Life Chief Executive Yeo Seung-joo. Through the purchase, the insurance firm will grow as a group that provides comprehensive financial services, and it sees Indonesia as a key region for its expansion into Southeast Asia, the CEO added.
If the deal is closed, Hanwha Life will become the first Korean insurer to advance into the overseas banking industry.
Founded in 1990, Nobu Bank has around 2.3 trillion won in total assets as of end-2023 and manages 115 branches across Indonesia. The bank specializes in lending to small and medium-sized enterprises and mortgage loans.
Hanwha Life aims to establish itself in Indonesia in the near term by combining its mobile financial services with Lippo Group’s expertise in bank management.
The Korean insurer will boost its sales in Indonesia through its digital banking system and Nobu Bank’s offline banking services.
The insurer said it will also ramp up insurance plan sales of its Indonesian affiliate and Lippo General Insurance through bancassurance and using Lippo Group’s strong local networks.