Shinhan Financial Group, South Korea's second-largest financial services firm, said on Saturday it will buy back a remaining 40.98 percent stake in its brokerage arm for around 200 billion won ($174.6 million), paving the way for delisting of the unit.
Under the plan, Shinhan, four percent owned by French bank BNP Paribas, would purchase 65 million shares in Goodmorning Shinhan Securities Co through a share swapping deal and at a public tender.
"By owning 100 percent in Goodmorning Shinhan Securities, we can get rid of a possible conflict of interest between shareholders in the two companies, as well as boosting efficiency in implementing strategies and distributing resources," the holding company said in a statement.
"After the share buying is completed, Goodmorning Shinhan Securities will be delisted. But the timeframe has not been set," Kang Hyun-woo, a spokesman for Shinhan Financial, told Reuters by telephone.
Shinhan currently holds 59.02 percent of the mid-size domestic brokerage which it acquired in 2002.
The plan, which was approved by a board meeting on Friday, would involve exchanging one Goodmorning common share for 0.1633 of a share in the holding company.
The share swapping is scheduled for December 23.
It would also involve Shinhan buying 1.5 million preferred shares of Goodmorning at 2,500 won each at a public tender, about 25 percent higher than the current share price. The tender was set for September 24 through October 13.
Once the deal is completed, the converted stocks would be traded as Shinhan Financial shares until the brokerage is delisted from the Korea Stock Exchange, the statement said.
Like other Korean lenders, Shinhan aims to grow its non-bank operations as it generates more than 90 percent of revenue from banks.
It also runs credit card, investment trust management and insurance units.