The Financial Services Commission held an agenda subcommittee meeting on the 10th and conducted a review regarding Woori Financial Group's acquisition of Tongyang Life Insurance and ABL Life Insurance, but it was reported that no final conclusion was reached. This is the second review following the one on the 27th of last month.
Woori Financial Group received a grade 3 in management evaluation after issues regarding inappropriate loans to family members of former Chairman Son Tae-seung were identified during an inspection by the Financial Supervisory Service. According to the Financial Services Commission’s merger and acquisition approval standards, financial holding companies that receive a grade 3 in management evaluation are generally not eligible for subsidiary inclusion.
However, the Financial Services Commission is considering conditional approval by comprehensively reviewing Woori Financial Group's improvements in internal controls and financial ratios. Woori Financial Group has also conveyed plans for improving internal controls and capital expansion to the financial authorities in order to receive conditional approval. The Financial Services Commission's agenda subcommittee is also focusing on reviewing Woori Financial Group's implementation measures for the identified issues.
The approval for Woori Financial Group's acquisition of the insurance companies will be finalized at a regular meeting following the Financial Services Commission's agenda subcommittee. Generally, conclusions from the agenda subcommittee are maintained at the regular meeting, but there are observations in the financial sector that Woori Financial Group's merger and acquisition cannot be easily predicted.
The regular meeting of the Financial Services Commission includes the Chairman, Vice Chairman, two permanent members, one non-permanent member, the head of the Financial Supervisory Service, the Vice Minister of Economy and Finance, the Deputy Governor of the Bank of Korea, and the President of the Korea Deposit Insurance Corporation, totaling nine participants. Given the participation of officials from other agencies, the possibility of opposition voices regarding Woori Financial Group's acquisition of the insurance companies cannot be ruled out. In particular, it has been reported that the Financial Supervisory Service holds a negative view of Woori Financial Group's acquisition of the insurance companies.
As a result, prospects have emerged that the agenda subcommittee will not make an early decision on the approval. Although the Financial Services Commission's regular meeting will be held on the 16th, it is expected that Woori Financial Group's insurance company acquisition agenda will not be presented.