Botched sales talks on KDB Life Insurance to test bank's leadership

Korea Development Bank (KDB) headquarters in Yeouido, Seoul / Yonhap

Korea Development Bank (KDB) leadership is being tested by its campaign to swiftly sell off tax-financed companies, following botched sales talks last week on KDB Life Insurance.

The failed talks between state-run KDB and Hana Financial Group come after the state-run lender successfully sold off Daewoo Shipbuilding & Marine Engineering (DSME), now rebranded Hanwha Ocean, to Hanwha Group, in May.

It was the first privatization among the KDB-controlled firms under Chairman and CEO Kang Seog-hoon, prompting optimism on Kang’s goal of accelerated sales of such companies where trillions of won were injected.

“And the botched sales attempt of KDB Life Insurance is casting a shadow on the current KDB leadership that it may struggle again as previous leaderships pursuing privatization of the firms,” an industry source said.

The source pointed out that the KDB for years has had two other businesses on its sales list ― shipping giant HMM and the country’s second-ranked flag carrier Asiana Airlines.

The source noted the fact that Hana Financial Group gave up the acquisition of KDB Life Insurance may lead to negative impressions of the insurer among other potential buyers.

The country’s third-largest financial holding company, Hana Financial Group has been pushing to diversify its non-banking portfolio.

The fact that it dropped its plan to acquire KDB Life Insurance suggests the insurer possibly presented insufficient value in the path for such diversification, the source explained.