By Jun Ji-hye | The Korea Times | March 17, 2025<\/p>\n
Woori Financial Group\u2019s planned acquisitions of Tongyang Life Insurance and ABL Life Insurance, worth approximately 1.55 trillion won ($1 billion), have hit a snag as the Financial Supervisory Service (FSS) decided to downgrade the company\u2019s management assessment rating from Level 2 to Level 3, industry and government officials said Monday.<\/p>\n
A financial holding company must have a management assessment rating of at least Level 2 to incorporate new subsidiaries.<\/p>\n
According to officials, the country\u2019s financial watchdog completed verbal consultations with the Financial Services Commission (FSC) to downgrade Woori\u2019s rating by one level.<\/p>\n
\u201cWe plan to officially notify the company later this week,\u201d an FSS official said.<\/p>\n
In August last year, Woori signed stock purchase agreements to acquire 70 percent of Tongyang Life\u2019s shares for some 1.28 trillion won and a 100 percent stake in ABL Life for about 265.4 billion won.<\/p>\n
As a result of the FSS’s latest decision, however, these planned acquisitions have hit a major roadblock.<\/p>\n
Under financial holding company supervision regulations, acquiring a subsidiary is essentially prohibited if the management assessment rating is below Level 3.<\/p>\n
If the acquisition is not completed by August this year, Woori stands to lose its 154.9 billion won deposit.<\/p>\n
This decision is a follow-up measure by the watchdog following last year\u2019s on-site inspection against the firm.<\/p>\n
The FSS moved up its regular inspection of Woori Financial Group by a year and conducted it in October after revelations of improper loans worth 73 billion won linked to the relatives and associates of Sohn Tae-seung, the firm\u2019s former chairman.<\/p>\n
Including these, the FSS announced on Feb. 4 that a total of 233.4 billion won in improper loans across 101 cases had been identified at Woori.<\/p>\n
The FSS also pointed out issues in Woori\u2019s acquisition process of the two insurers owned by China\u2019s Dajia Insurance Group, stating that the company failed to properly report the matter to its board of directors.<\/p>\n
When inspection results were announced, the FSS stated, \u201cWe will soon determine Woori\u2019s rating, reflecting the inspection findings.\u201d<\/p>\n
Determining the management assessment rating typically takes more than a year, but in this case, the process was expedited considering the firm\u2019s pending insurance acquisitions.<\/p>\n
The management assessment for financial holding companies is broadly categorized into three areas \u2014 risk management, which accounts for 40 percent, financial soundness at 30 percent and potential shocks at 30 percent.<\/p>\n
The downgrade was reportedly driven by lower scores in risk management, which covers internal controls and potential shocks, which assess subsidiary management.<\/p>\n
However, a rating of Level 3 or lower does not necessarily mean the acquisition will be entirely canceled, as the final approval rests with the FSC, the supervisory body above the FSS.<\/p>\n
If Woori Financial is deemed to have met certain conditions, such as increasing its capital or disposing of nonperforming assets, the acquisition could still be approved.<\/p>\n
An FSC official said, \u201cWe will make a fair decision based on principle.”<\/p>\n","protected":false},"excerpt":{"rendered":"
By Jun Ji-hye | The Korea Times | March 17, 2025 Woori Financial Group\u2019s planned acquisitions of Tongyang Life Insurance and ABL Life Insurance, worth approximately 1.55 trillion won ($1 billion), have hit a snag as the Financial Supervisory Service (FSS) decided to downgrade the company\u2019s management assessment rating from Level 2 to Level 3,… Read More »Management rating downgrade complicates Woori’s insurance acquisitions<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"off","neve_meta_content_width":70,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,3],"tags":[],"class_list":["post-2025","post","type-post","status-publish","format-standard","hentry","category-korea","category-news"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts\/2025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/comments?post=2025"}],"version-history":[{"count":1,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts\/2025\/revisions"}],"predecessor-version":[{"id":2026,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/posts\/2025\/revisions\/2026"}],"wp:attachment":[{"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/media?parent=2025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/categories?post=2025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurance.vincent-chen.com\/en\/wp-json\/wp\/v2\/tags?post=2025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}