Hana Financial Group, which took part in the preliminary bid for YeByeol Non-Life Insurance (formerly MG Non-Life Insurance), is said to have decided not to join the main bid and not to pursue an acquisition of another non-life insurer within the year. Instead of moving into mergers and acquisitions (M&A) this year, it plans to focus on strengthening the fundamentals of its affiliates.
According to the financial sector on the 2nd, Hana Financial has decided not to participate in the main bid for YeByeol Non-Life Insurance scheduled for the 30th. After reviewing the feasibility of acquiring YeByeol Non-Life Insurance, Hana Financial was said to have decided to skip the main bid because, in addition to acquisition funding, a large-scale capital injection would be required. On Jan. 30, three companies—Hana Financial, Korea Investment Holdings, and JC Flowers—joined the preliminary bid for the open sale of YeByeol Non-Life Insurance.
A senior Hana Financial official said, "Acquiring a non-life insurer is important, but looking at the quality and composition of capital, it could actually make the group more strained. We won't rush and will strengthen the group's portfolio over the medium to long term." The market expects that about 1.3 trillion won in additional capital will be needed to normalize YeByeol Non-Life Insurance's management.
Hana Financial also reviewed the acquisition of Lotte Non-Life Insurance, which is up for sale, but likewise decided not to participate in the bidding. The high sale price is cited as the reason.
Beyond YeByeol Non-Life Insurance and Lotte Non-Life Insurance, Hana Financial has consistently shown interest in strengthening its insurance affiliate portfolio, including taking part in the race to acquire KDB Life. Last year, Hana Financial posted net profit of 4.0029 trillion won, with profit from the nonbanking institutional sector at 517 billion won, accounting for only 12.1% of the total.
However, delays in normalizing The-K Non-Life Insurance (now Hana Insurance), acquired in 2020, are holding Hana Financial back. Hana Insurance posted a net loss of 47 billion won last year, widening from a loss of 30.8 billion won a year earlier. It has not turned a profit once since the 2020 acquisition.
Hana Financial has been continuously injecting funds into Hana Insurance. Since being acquired by Hana Financial, Hana Insurance carried out four rights offerings through October last year. Hana Financial's cumulative support has reached 570 billion won. In this situation, acquiring YeByeol Non-Life Insurance, which carries the bad assets of MG Non-Life Insurance, appears to have been judged as posing greater risk factors than potential synergy with Hana Insurance.
A senior official in the financial sector said, "Hana Financial will focus more on normalizing affiliates and strengthening fundamentals this year rather than on aggressive M&A."