The company announced on April 24 that it will acquire a 40 percent stake in Nobu Bank held by Lippo Group, the sixth largest conglomerate in Indonesia. The process of equity investment will be finalized through contract signing between the two parties and approval from regulatory authorities in both countries. Currently, Lippo Group is the largest shareholder of Nobu Bank, but after the agreement, Hanwha Life will become the largest shareholder.
This marks the first time for a domestic insurance company to venture into overseas banking. Earlier this year, the Financial Services Commission allowed insurance companies to own foreign banks through amendments to the Enforcement Decree of the Insurance Business Act.
Established in 1990, Nobu Bank is a mid-sized bank ranked within the top 30 locally. With total assets of 2.3 trillion won (US$1.67 billion) as of the end of last year, it owns 115 branches across Indonesia. The bank has a workforce of 1,247 employees. Its main products include personal mortgage loans and working capital loans for small and medium-sized enterprises. It reported a net profit of 12 billion won last year.
Indonesia, along with Vietnam, is renowned for its high growth potential in Southeast Asia. With a population of 270 million, Indonesia ranks fourth in the world. In 2022, its gross domestic product (GDP) growth rate reached 5.3 percent, outpacing South Korea’s 2.6 percent and the global average of 3.1 percent.
Hanwha Life’s successful investment in Nobu Bank is largely attributed to the leadership of Kim Dong-won, Chief Global Officer (CGO) and President. Kim, the second son of Hanwha Group Chairman Kim Seung-youn, assumed the role of CGO in February last year and has been spearheading Hanwha Life’s overseas operations ever since.
President Kim has focused on building a network with global leaders by attending the World Economic Forum, also known as the Davos Forum, six times. The contract this time was also initiated by a conversation between Kim and John Riady, CEO of Lippo Group, at the Davos Forum in January this year.
Hanwha Life and Lippo Group have maintained a friendly cooperative relationship. Hanwha Life acquired a 62.6 percent stake in Lippo General Insurance, the 14th largest non-life insurance company in Indonesia, in March last year. Hanwha Investment & Securities, a sub-subsidiary of Hanwha Life, is also awaiting regulatory approval after signing an acquisition agreement with Lippo Group affiliate Ciptadana Securities and Ciptadana Asset Management in June last year. With these developments, Hanwha Group has completed its portfolio of a comprehensive financial company in Indonesia, covering life insurance, non-life insurance, banking, and securities.
Hanwha Life plans to use Indonesia as a base to pursue its expansion strategy in Southeast Asia. In the future, it aims to maximize synergy by utilizing Nobu Bank’s bancassurance channels to sell products from Hanwha Life Indonesia and Lippo General Insurance.
Hanwha Life’s first overseas subsidiary, Hanwha Life Vietnam, became the first domestic insurance company this year to receive cash dividends of approximately 54 billion won from its overseas local subsidiary.
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