The approval comes with stiff conditions, including the implementation of internal control reforms and capital management oversight through 2027.
Korea’s Financial Services Commission (FSC) has approved Woori Financial Group’s acquisition of Tongyang Life Insurance and ABL Life Insurance, clearing the way for the two insurers to become formal subsidiaries of the banking group.
According to a statement, the decision includes strict conditions to ensure the financial group strengthens its internal controls and maintains sound capital management. Under the terms of the approval, Woori Financial Group must implement a comprehensive internal control improvement plan and a mid- to long-term capital management strategy, both of which were submitted as part of the acquisition application.
The group is required to report progress on these plans to the Financial Supervisory Service (FSS) on a semi-annual basis through the end of 2027. In turn, the FSS will conduct inspections and submit annual updates to the FSC.
The FSC said that if Woori fails to follow through with its commitments, regulatory action may be taken, including corrective orders or forced divestment under Article 57 of the Financial Holding Companies Act.
Review process
Woori first submitted its application on 15 January 2025, prompting a review by financial regulators. The review assessed the soundness of Woori’s financial and management status, the feasibility of its business plans, and potential impacts on market competition. The Fair Trade Commission was also consulted to evaluate the acquisitions’ competitive implications.
To address concerns that Woori’s supervisory rating was below the ideal threshold (grade 2), the FSC conducted four task force meetings. These meetings examined whether non-financial efforts, such as internal control reforms and governance improvements, could offset concerns about current ratings. Ultimately, the FSC concluded that if Woori’s plans are faithfully implemented, the group could be deemed financially sound.
Woori’s commitments
Woori Financial Group has already completed 17 of 21 improvement actions recommended by regulators in a 2024 inspection, and has laid out detailed plans for the remaining four.
Its internal control plan includes:
- KRW 100 billion (USD 71.6 million) in infrastructure investments over five years
- An expanded compliance division
- Enhanced evaluation metrics tied to internal controls
- Reforms to ensure transparent and fair CEO succession
In terms of capital management, Woori committed to reducing risk-weighted assets by selling real estate and equity holdings and boosting its core capital base.