OK Savings Bank, the largest shareholder of iM Financial Group, sold 46 billion won worth of shares to an affiliated company. This occurred due to the soaring stock price of iM Financial, leading to issues regarding the capital regulations for savings banks.
According to the financial sector on the 15th, OK Savings Bank sold 3,230,338 shares of iM Financial to its affiliated company OK Capital through a block deal (off-hours large-scale transaction). The sale price was 14,240 won per share, totaling 46 billion won. The equity stake decreased from 9.7% to 7.72%.
Both OK Savings Bank and OK Capital are subsidiaries of OK Holdings, which serves as the holding company for OK Financial Group. Choi Yoon, the chairman of OK Financial, along with family and relatives, holds about 21% of the equity in OK Capital.
The sale of shares by OK Savings Bank is due to the rise in iM Financial's stock price. According to the regulations on the supervision of mutual savings banks, the total value of the stocks held by savings banks should not exceed 50% of their equity capital. As of the first quarter this year, OK Savings Bank's equity was 1.6105 trillion won, with the value of share assets among its securities totaling 660.3 billion won. Recently, amid expectations for expanded shareholder returns, the stock price of iM Financial skyrocketed, resulting in OK Savings Bank's stock assets exceeding 50% of its equity.
The stock price of iM Financial closed at 15,510 won on this day, marking a 19.31% increase compared to the 1st of this month (13,000 won). Although OK Savings Bank's assets increased due to the rise in iM Financial's stock price, regulatory capital issues forced it to reduce its equity stake. OK Savings Bank stated, "We decided to dispose of our shares to comply with the stock holding limits for savings banks."
Due to iM Financial's plans to retire its own shares, OK Savings Bank is now in a position where it must consider further equity sales. Last year, when iM Bank (formerly Daegu Bank) transitioned to a commercial bank, the limit on the major shareholder's equity stake was lowered to 10%. iM Financial plans to retire a total of 150 billion won in own shares by 2027, with 40 billion won worth scheduled for retirement this August. As OK Savings Bank has sold its shares to an affiliate, its equity stake remains at 9.7%. If the equity stake exceeds 10% due to the retirement of own shares, OK Savings Bank will have to sell part of its equity again.