Shinhan Financial acquires BNP Paribas Cardif General Insurance

Shinhan Financial Group has acquired BNP Paribas Cardif General Insurance, the non-life insurance unit of French banking group BNP Paribas in a move to further expand its business portfolio.

Shinhan Financial, South Korea’s second-largest banking group, said on Monday it is acquiring a 95% stake in BNP Paribas Cardif General Insurance for about 40 billion won ($34 million) to enter the domestic non-life insurance market.

It signed a share purchase agreement with France’s BNP Paribas Group on Friday.

Shinhan, which offers various financial services ranging from banking to life insurance, securities, credit card service and asset management, has been absent from the non-life insurance market.

“Shinhan has grown successfully in the local financial market through a series of M&As. With this latest deal, we aim to complete our business portfolio and offer improved customer services by creating synergy with other affiliates of our group,” said a company official.

BNP Paribas launched the non-life insurer in 2014 by acquiring ERGO Daum Direct General Insurance Co., an online auto insurance firm.

With 108.4 billion won in assets and 48 billion won of debt as of the first half of 2021, BNP Paribas Cardif General Insurance’s main business areas include corporate insurance and special-purpose insurance.

Shinhan, which has been seeking to acquire a non-life insurance firm, plans to turn BNP Paribas Cardif General Insurance into a fully digitalized insurer.

The company said it expects the acquisition to create synergy with Shinhan Life Co., created in July through the merger of Shinhan Life Insurance Co. and Orange Life.

SPLIT WITH BNP PARIBAS

Shinhan Financial had made no significant M&A deals for more than a decade since 2007 when it acquired LG Card, which later was renamed as Shinhan Card.

However, with Cho Yong-byoung taking the helm of the group as chairman in 2017, Shinhan Financial has been pursuing non-organic growth through mergers and acquisitions.

The group took over the retail unit of Australia’s ANZ Bank in Vietnam in 2017, followed by a series of small deals in Korea, including acquisitions of ING Life Insurance, Asia Trust and a venture capital firm called Neoplux Co.

In Korea, Shinhan Financial is fiercely competing against market leader KB Financial Group, which also offers comprehensive financial services, including non-life insurance through KB Insurance, formerly LIG Insurance.

In recent years, Shinhan Financial has been taking over stakes in joint ventures with BNP Paribas Group in a move to gradually split with the French firm after years of partnership.

Last year, Shinhan acquired 35% of Shinhan BNP Paribas Asset Management Co. from BNP Paribas to wholly own the company.

The move was part of Group Chairman Cho’s initiative to reorganize the group’s asset management-related affiliates.

Write to Dae-Hun Kim at daepun@hankyung.com
In-Soo Nam edited this article.