Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Hankook Capital, JB Financial Group compete to acquire JT Savings Bank
JT Savings Bank headquarters / Courtesy of JT Savings Bank
By Anna J. Park
By Anna J. Park
In Korea's M&A scene, the question of who's going to acquire JT Savings Bank has been grabbing investors' attention lately. The savings bank is currently owned by Tokyo-headquartered J Trust Group, and has been labelled a cash cow due to its stable profit performance.
According to industry sources, the sale price for JT Savings Bank is estimated at around 200 billion won ($168 million), which is about four times the 50 billion won the current owner paid when it purchased the savings bank in 2015.
A preliminary bidding was held at the end of last month with various financial institutions ― from private equity firms (PEFs) to financial groups ― showing interest. With a final bidding expected to be held in early September, Hankook Capital and JB Financial Group are considered the two main contenders.
Hankook Capital is a credit company whose largest shareholder is the Military Mutual Aid Association. The firm runs various types of installment credit financing, while raising necessary capital by issuing corporate bonds.
Market watchers as well as an official of the credit firm explained that the firm is interested in acquiring the savings bank to complement its weakness in securing stable cash deposits. The capital company went through a rather unstable period during the shocks from the global pandemic's sudden spread earlier this year, as some local securities firms dumped massive amounts of corporate bonds amid ELS margin call situations in late March.
“The company is planning to participate in the final bidding, as we think acquiring the savings bank that is able to receive stable savings and deposits is favorable to the firm's business,” an official from Hankook Capital said.
As of the first quarter this year, JT Savings Bank's assets stood at around 1.38 trillion won, with a net quarterly profit of 1.7 billion won. The savings bank also has a well-balanced portfolio of corporate and personal loans; the loans to companies accounted for 57.66 percent, while another 40.7 percent of credit was issued as personal loans. The bank also boasts a late payment rate of less than 3 percent for those loans, which is much lower than the 7 percent or 8 percent of other small savings banks put up for sale recently.
JB Financial Group is another contender for the M&A deal; the local financial group based in the nation's southwestern Jeolla region is one of the few financial groups in Korea that does not have its own savings bank as an affiliate.
Meanwhile, the union of JT Savings Bank is calling for stabilization of employment. The union condemned J Trust Group for not transparently communicating with the union members, saying the group has denied consulting with the union about the employment status of their staff following the sale.