新韩金融集团确认6933亿韩元收购乐天非寿险77.04%股权，盘中跌逾3%，市场聚焦资本与增发压力

Shinhan Financial Group fell more than 3% in intraday trading after confirming its acquisition of Lotte Non-Life Insurance. Investors focused first on the capital burden and the possibility of additional share issuance during Lotte Non-Life's turnaround, rather than on longer-term expectations for a stronger non-life insurance business.
Shinhan Financial Group was trading at 96,300 won as of 10:10 a.m. on the 14th, down 3,400 won, or 3.41%, from the previous session, according to the Korea Exchange. The stock opened at 98,600 won and slid as low as 95,700 won during the session.
Shinhan Financial Group signed a share purchase agreement on the 13th to buy a 77.04% stake in Lotte Non-Life Insurance from JKL Partners for 693.3 billion won. The price implies a total enterprise value of 900 billion won for Lotte Non-Life. Shinhan plans to acquire the remaining shares after securing regulatory approval and then merge the insurer with its existing subsidiary, Shinhan EZ General Insurance. The combined non-life unit is targeted to contribute at least 120 billion won a year to the group's consolidated earnings within three years.
The market's focus is on the capital impact. Hanwha Investment & Securities estimated that the acquisition will lower Shinhan Financial Group's common equity Tier 1 (CET1) ratio by 0.19 percentage point. Capital could be deducted by the full amount injected in the purchase of the remaining stake and any further share issuance. On current figures, the brokerage calculated that every additional 100 billion won injected would reduce the CET1 ratio by about 0.027 percentage point.
Lotte Non-Life's capital soundness is another hurdle. The insurer's Tier 1 capital ratio stood at minus 6.4% at the end of the second quarter. Shinhan Financial Group plans to shore up capital through a capital reduction, a return of capital to shareholders and a share issuance of about 300 billion won, but analysts said further capital injections cannot be ruled out once changes to actuarial assumptions are taken into account. iM Securities projected that Lotte Non-Life's contractual service margin (CSM) could fall to about 1.2 trillion won from roughly 2.2 trillion won if a shift to the principle-based model and other factors are reflected.
Still, some analysts said the purchase price itself is not excessive. LS Securities said the actual price came in below the 1 trillion won figure initially discussed in the market and that the deal could bring longer-term benefits by strengthening the group's non-life insurance operations. It added that Lotte Non-Life will need time to normalize earnings and that the group's cash flow could come under pressure because dividends from the insurer are unlikely for a considerable period.
Analysts expect how quickly Lotte Non-Life's profitability and capital adequacy can be normalized to be the key variable for the share price. "For now, there is not enough evidence either to support or to rule out an improvement at Lotte Non-Life after the acquisition closes and capital is raised," said Kim Do-ha, an analyst at Hanwha Investment & Securities. "Given that this is a deal accompanied by both hope and concern, we expect investor fatigue to build for some time."