With a government announcement expected on Friday about Korean bancassurance regulations, ING and Kookmin have announced that in addition to their existing bancassurance relationship, they will look to explore other business opportunities including acquisitions.
Speculation has centred on whether the two banks will make a 50/50 joint bid for Hanil Life Insurance, which experienced problems during the financial crisis. It is currently controlled by the government via KDIC.
The top Korean bank and the Dutch multinational have enjoyed a relationship since the IMF crisis. ING currently owns 3.87% of Kookmin, while Kookmin has a 20% stake in ING Life Korea. However, if the two were to make a joint bid for Hanil it would signal a new era in their relationship.
No one is exactly sure what Hanil Life is worth, but its key value is that it could become a high end bancassurance specialist. It has all of the requisite licences, and while ING could design the products it could manufacture them.
The business model here would be based on Kookmin's own push into private banking. The particular products that Hanil would produce would be designed for the upper income segment. These would most likely be life insurance wraps that created tax efficient structures for wealthy individuals.
Meanwhile, Kookmin will distribute ING life insurance products to the rest of it client base, although not on an exclusive basis thanks to Korean regulation that forbid exclusivity.