Dutch ING Groep NV expects to maintain cross-shareholdings with South Korea's Kookmin Bank, although it has no plan to raise the stake in the lender yet, the head of ING Life Korea told Reuters on August 16.
The Dutch financial services group owns 4 percent of Kookmin, the country's top lender, and 20 percent of a fund management arm of Kookmin, as well as 49 percent of KB Life, Kookmin's insurance unit, as part of strategic tie-ups.
In return, Kookmin commands 20 percent of ING Life Korea, the fourth-biggest life insurer in South Korea, with the stake valued by Kookmin at 129.2 billion won ($138.6 million) at end-June.
"There is no need to change the structures. We are very happy with our stake in Kookmin Bank and KB Life," Ron van Oijen, who has led ING Life since August 2004, said in an interview.
"On top of that ING owns slightly over 4 percent of Kookmin. We want to maintain our relationships with Kookmin. But we will not increase our stake in KB Asset because we have our own asset management."
The professional soccer player-turned-ING Korea CEO said it could spend money for better use in other acquisitions or businesses, instead of buying more shares in Kookmin.
In June, ING said it was buying a bank in Turkey for $2.67 billion, and also agreed to buy an asset management firm in South Korea for an undisclosed sum.
Kookmin has to reduce its holding in the life insurer to below 15 percent by the end of 2007, complying with regulators' conditions after it bought half of a small-sized domestic life insurance firm, now called KB Life, in 2004.
Van Oijen said ING had already agreed to buy back 5 percent in ING Life from Kookmin and was awaiting regulatory approval, which he expected to happen ahead of the planned capital injection of 400 million euros ($536.8 million) into ING Life jointly with Kookmin.
After the share buyback and infusion, Kookmin's stake in ING Life will decline to 14.9 percent. The Dutch group has no intention to buy back the stake from Kookmin at this point.
ING holds 6 percent of South Korea's $300 billion life insurance market, the seventh-biggest in the world, with top three domestic players controlling 60 percent.