South Korea’s IBK Industrial Bank Sells Remaining Korea Investment Holdings

IBK Industrial Bank has sold off all of its remaining shares in Korea Investment Holdings, ending a capital relationship between the two companies that spanned more than 20 years. The disposal came immediately after the South Korean government lifted its suspension of asset sales by public institutions.

According to investment banking industry sources on the 2nd, IBK Industrial Bank sold all 62,300 Korea Investment Holdings shares on the open market over four days from the 27th to the 30th of last month. Based on the closing price on the 30th of last month, the stake was worth about 9.3 billion won (approximately $6.9 million). The sale process was completed within four days of its start.

The two companies’ ties date back to 2005-2006, when IBK Industrial Bank bought 1.25 million Korea Investment Holdings shares in two tranches. The purchase followed a strategic business agreement with Korea Investment Financial under a plan to build a comprehensive financial services system and broaden its revenue base.

The situation changed, however, when IBK Investment Securities was launched in 2008. With its own securities affiliate in place, cooperation with Korea Investment Financial never materialized to the extent originally hoped, and the alliance between the two companies effectively stalled. IBK Industrial Bank began unwinding its holdings in September last year, first disposing of 1.1877 million shares.

The brakes came from an unexpected quarter. In November of the same year, South Korean President Lee Jae-myung ordered a halt to government asset sales, freezing the sale process for the remaining stake. The Prime Minister’s Office later lifted the suspension, and the Financial Services Commission recently convened its asset-sale review committee, completing the administrative procedures needed to resume the sale, according to reports.

With this disposal, IBK Industrial Bank’s stake in Korea Investment Holdings has fallen to 0%. An asset invested more than 20 years ago for a strategic partnership has now been fully unwound after passing through two inflection points: the establishment of its own subsidiary and a shift in government policy.

Asset sales by other state-run financial institutions are also expected to pick up pace. IBK Industrial Bank currently holds a split stake in Korea Financial Safety alongside commercial banks, drawing attention to whether the resumption of sales will lead to further stake cleanups.

The market sees the deal as more than a simple recovery of a…