OK Financial, which began with lend business in 2002, is taking shape as a comprehensive financial group through aggressive mergers and acquisitions (M&A). In the financial sector, there is speculation that OK Financial will ultimately try to enter the primary banking sector.
According to the financial sector on the 14th, OK Financial Group was recently selected as the preferred bidder to acquire YeByeol Non-Life Insurance (formerly MG Non-Life Insurance). If OK Financial succeeds in the final acquisition of YeByeol Non-Life, it will become the first financial group originating from lend business to own a savings bank, a capital company, and an insurer. YeByeol Non-Life is an entity established in Oct. last year with a 100% investment by the Korea Deposit Insurance Corporation (KDIC), and it is carrying out the management and maintenance of insurance contracts of MG Non-Life Insurance, which was designated as a failed financial institution.
The predecessor of OK Financial was Apro Financial, which had a strong negative image in the early 2000s due to high interest rates. In 2007, it introduced the "Rush & Cash" brand to improve its image. Afterward, in 2014, it acquired Yeju Savings Bank and Yenarae Savings Bank, which were failed financial institutions, created OK Savings Bank, and entered the secondary banking sector. In 2016, it acquired Korea Citigroup Capital to create OK Capital, and recently it attempted acquisition talks with Hanyang Securities, Sangsangin Savings Bank, and Pepper Savings Bank.
OK Financial preemptively improved its financial structure and moved to acquire YeByeol Non-Life. The acquirer of YeByeol Non-Life can receive government support funds for post-acquisition normalization, and among the acquisition candidates, OK Financial was reportedly the only one to request an amount within the government support limit of 1.15 trillion won.
As of the end of the first quarter this year, OK Savings Bank's total liabilities stood at 10.3383 trillion won, down 1.7124 trillion won from a year earlier. The BIS-based capital adequacy ratio, which indicates a bank's financial soundness, was 16.8% at the end of the first quarter, improving 3.45 percentage points (p) from 13.35% at the end of the first quarter last year.
OK Financial is also increasing its stakes in regional financial holding companies. OK Financial holds 9.02% and 9.99% stakes, respectively, in JB Financial Group(175330) and iM Financial Group(139130). Its stake in BNK Financial Group(138930) increased to 5.17% on the 5th of last month. Under the current Financial Holding Companies Act, a single shareholder cannot hold 10% or more of a financial holding company's shares.
OK Financial says it is a "simple investment in undervalued financial holding company stocks," but the industry believes OK Financial will also attempt to enter the primary banking sector. There is an assessment that the individuals recommended by OK Financial have been appointed as outside directors at JB Financial Group and BNK Financial Group, expanding the foundation for participating in the management of financial holding companies.