Shinhan Financial Group will acquire 77.04% of Lotte Non-Life Insurance for 693.3 billion won as it moves to expand its non-life insurance business. It plans to secure the remaining stake and make the insurer a wholly owned subsidiary. It also plans to merge it with Shinhan EZ Non-Life Insurance to strengthen its non-banking portfolio.

Shinhan Financial Group said on Monday it signed a share purchase agreement to acquire 77.04% of Lotte Non-Life Insurance for 693.3 billion won. The stake is held by JKL Partners.

Shinhan Financial plans to acquire the remaining 22.96% stake after follow-up procedures such as approvals from financial authorities. It will then pursue the integration of Lotte Non-Life Insurance and Shinhan EZ Non-Life Insurance. It also plans to inject additional capital to improve financial soundness.

Shinhan Financial plans to expand its business base by combining Lotte Non-Life Insurance's customer and sales base with the group's financial channels and digital capabilities. Through integration with Shinhan EZ Non-Life Insurance, it will reduce overlapping costs and pursue operational efficiency focused on profitability.

After it becomes a wholly owned subsidiary, it will also improve its capital structure. It plans to boost soundness by injecting additional resources so it can respond to the basic capital K-ICS ratio regulations set to be introduced from next year.

The acquisition will be carried out by reallocating capital held by Shinhan Financial without external fundraising.

A Shinhan Financial official said it would combine Lotte Non-Life Insurance's insurance business experience, customer base and sales capabilities with Shinhan Financial's capital and risk management and digital capabilities.