Photo courtesy of Yonhap News

 

 

[Alpha Biz= Kim Jisun] SEOUL – Negotiations for OK Financial Group to acquire SangSangin Savings Bank have collapsed, delaying broader efforts to restructure South Korea’s struggling savings bank sector.



According to industry sources on July 31, OK Financial had completed due diligence on SangSangin late last year and entered final-stage talks, with both sides reportedly narrowing the sale price to around ₩108 billion and nearly reaching a share purchase agreement (SPA).



However, disputes over employment succession terms derailed the negotiations. SangSangin has since informed financial authorities that it is terminating discussions with OK Financial and is now considering a private equity (PE) buyer instead.



An industry insider noted:

“Even while talks with OK Financial were ongoing, SangSangin maintained parallel discussions with other private equity firms.”



SangSangin Savings Bank has been under pressure from the Financial Services Commission (FSC) to sell after its parent SangSangin Group faced regulatory sanctions. Chairman Yoo Jun-won was hit with a three-month suspension in 2019 over illegal lending practices, prompting the FSC in October 2023 to order SangSangin to divest over 90% of its stakes in SangSangin Savings Bank and SangSangin Plus Savings Bank, citing a lack of major shareholder eligibility.



SangSangin has also been subject to prompt corrective action over deteriorating financial soundness. While negotiating the sale to OK Financial, it simultaneously filed a lawsuit to suspend the FSC’s divestment order. After losing the first trial, the group has filed an appeal.



The breakdown of the OK Financial deal now casts uncertainty over both SangSangin’s future and the industry-wide clean-up process for weak savings banks.

 

 

 

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