1. No category

Conversion to Meritz Financial Holding Company
June 2010
Agenda
1
I. Why do we need to convert
Ⅱ. Conversion Method
Ⅲ. Conversion Effect
Ⅳ. Scheduled Date
The need to create synergy to secure revenuerevenue-based business and maintain stable market position
2
under the current group business line
group,
up, the creation plan
In order to overcome weaknesses of subsidiaries under Meritz gro
raise
e the necessary
of recapitalization and synergy consolidation is in need to rais
conditions
Domestic NonNon-life insurance, securities,
asset management positioning matrix
35.0%
KB Asset
Management
Mirae asset
Management
Meritz
F&M
25.0%
Dongbu
F&M
Meritz
Top 5 Avg
LIG
Hyundai
Marine
15.0%
Korea
Daewoo
Investment
Samsung
Securites
Secuties
ROE
Comparison with other industries
GAP
Samsung F&M
5.0%
Meritz
Securities
-0.1%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-5.0%
Meritz
Top 5 Avg
GAP
Meritz Asset
management
-15.0%
M/S
(Source: Financial Statistic Information, FY09 3Q Public data)
Meritz
Top 5 Avg
GAP
NonNon-life Insurance
Share’
Share’s
M/S
equity
8.2%
612.9
18.1%
1,822.2
Assets
5,800.8
13,999.6
-9.9%
-1,209.3
Securities
Share’
Share’s
M/S
equity
1.3%
529.5
7.8%
2,450.2
1,991.8
13,147.8
-6.4%
-11,156.0
-1,920.6
Asset Management
Share’
Share’s
M/S
equity
0.2%
7.8
8.6%
207.0
-8.3%
-199.1
-8,198.8
Assets
Assets
8.1
247.8
-239.7
(Source: Financial Statistic Information, FY09 3Q Public data, Unit-bn KRW)
※ Based on 12 non-life insurance (Including Kyobo direct)
Need of diversification of financial business to provide comprehensive
comprehensive financial service
3
Enhance customer’
customer’s loyalty through oneone-stop comprehensive financial service, and in
order to secure new engines for sustainable growth of the group, diversification of
financial business is needed.
Function of financial service and business line
Operating business
Function of Financial service
Financial
Investment
Non-life
Payment
Financial
Derivative
Deposit
Credit
Information
Loan
Trust
Security
Foreign
Exchange
Asset
Management
Operating
Assets
Insurance
Research
Asset
Management
bank
Savings
bank
Life
insurance
Sales
professional
Credit
information
Loan
NonNon-operating business
Variable
Insurance
Consulting
saless of financial products 4
Need of proactive measure for division of manufacturing and sale
- In order to proactively respond to introduction of exclusive sales
sales company for the
sales of comprehensive financial products and development of IntegratedIntegrated-type channel,
It needs to strengthen the competiveness of the group’
group’s sales company.
- Financial holding company which can share customer DB will benefit
benefit to take off the
sales company.
< Exclusive sales company of financial product
will be introduced in
in 2010>
☞ Sales of any kind of financial products are possible
☞ Maintain independent status segregated from manufacturer
☞ Provide comprehensive financial service through
visiting solicitor (=financial product sales plaza)
Purpose of new
• Measure to segregation of
manufacture and sales
• Sales of any kind of financial
products are possible
• Comparison among financial
products
• Reformation of Financial
consumer protection system
bank
card
Individual
customer
NonNonlife
loan
Corporate
customer
Life
insurance
.
.
.
Asset
Financial
ManageManageinvestment
ment
Sales
subsidiary
.
.
.
VIP
Limit of diversification of business line
5
There is limit to provide comprehensive financial service as the amounts of investment
affordability under the current corporate governance are KRW110 bn ~ 160 bn.
bn.
Corporate governance and investment affordability
Major shareholder
21.4%
Meritz Fire
30.5%
Securities
100%
Investment
100%
Financial
Information serv
• Investment affordability
- KRW100 bn ~ 150 bn
No affordability to invest
• Total Investment affordability : KRW155.7 bn
• Amount invested : KRW143.1 bn
(invested to subsidiaries)
• Remaining amount to invest : KRW 12.6 bn
100%
Ritz Partners
Need to establish the independent management system
6
As Meritz Fire govern the subsidiaries directly, there is a possibility
possibility that the risks of subsidiary can
spread into F&M’
F&M’s business. Therefore change of the structure of governance is in need for the
independent management of subsidiaries.
Structure of group governance
Fire
30.5%
Security
100%
Investment
100%
IT
100%
Shin dong bang
Ritz
51%
Hanjin Korindo
unlisted (Indonesia)
unlisted (Hong kong)
kong)
90%
Hwagi invest
100%
unlisted (China)
Control Tower’
Tower’s management is in need to improve efficiency7
In order to improve group’
group’s efficiency, Control Tower’
Tower’s strategic role:
role: restructuring,
expansion of new business, the managing role:
role: prevent risk, trimming down
overlapping resources, the operating role:
role: strengthening business through customers,
channels, products is in need
Control Tower
Management role
Strategic role
Operating role
F&M
Securities
Asset
management
Ritz Partners
Financial
Information
Improvement of efficiency through focusing on core competence
8
oles to relevant subsidiaries
Improvement of management efficiency by integrating the common rroles
while each company focusing on core competence
Core function
Fire
• business plan
• HRㆍ
HRㆍITㆍ
ITㆍCS plan
Securities
• Marketingㆍ
MarketingㆍSupporting
• Investment/Loan
Investment
• Product
• Risk management
• Actuary
Ritz Partners
• Compliance
• Audit
IT Service
• IR
• Finance management
Outsourcing
• Accounting
Common function
• Advertising
• System operation
• IT maintenance
• Purchasing
• Rent
• Call center
• HR
• Salary
• Legal service
• Accounting
• Real estate
• Recovery
Holdings
- Brand managing
Shared Service Center
- Call center
Outsourcing company
-Maintenance,
Maintenance, Rent,
Purchasing, Education
Agenda
9
Ⅰ. Why do we need to convert
Ⅱ. Conversion Method
Ⅲ. Conversion Effect
Ⅳ. Scheduled Date
Meritz Financial Group as of March 31st 2010
(KRW :Bn
:Bn)
Bn)
Meritz F&M
Meritz
Securities
Meritz Asset
Management
10
Meritz
Financial
Information
Ritz Partners
Asset
6,035.0
3,635.2
12.7
7.8
9.5
Liability
5,355.0
2,956.8
0.5
5.2
0.2
Capital
680.0
678.4
12.2
2.6
0.9
61.9
308.9
15.0
1.0
10.0
140.4
24.1
-1.0
0.3
-0.5
Capital
Stocks
Net Income
* 종금증권:
종금증권: 종금,
종금, 증권 합산 수치 (e)
Meritz Financial Company’
Company’s Share Structure (2010. 4. 1)
Major
Shareholder
21.4%
Meritz F&M
•Capital Stocks: KRW61.9 bn
• Market Cap : KRW 953.3 bn
•Treasury: 13.9%
30.71%
Meritz Securities
100%
Meritz Asset
Management
100%
Meritz Financial
Information
100%
Ritz Partners
•Financial Co
• Financial Co
• Non-Financial Co
•Financial Co
• Capital : 308.9
•Capital: 15.0
• Capital: 1.0
• Capital : 10.0
• Market Cap : 307.3
* Meritz Securities stake : includes special account (767,430 shares, 0.2%)
* Meritz F&M Treasury : Includes Treasury fund(1,110,550 shares, 0.9%)
* Market Cap: Based on 2010.5.24
11
Meritz Financial Company’
Company’s Share Structure (2010. 4. 1)12
(Unit :
Shares, %)
Meritz F&M
Shares
Meritz Asset
Management
Meritz Securities
%
Shares
%
Shares
Major
Shareholder
26,500,725
21.4%
5,013,910
1.6%
Meritz F&M
-
-
94,851,481
30.7%
Related
Companies
5,400,808
4.4%
17,955,144
5.8%
ESOP
6,181,311
5.0%
14,135,077
4.6%
17,232,157
13.9%
3,952,101
1.3%
Treasury
16,121,607
13.0%
3,952,101
1.3%
Treasury
Fund
1,110,550
0.9%
-
-
Favorable
Share
55,315,001
44.7%
135,907,713
44.0%
Others
68,484,999
55.3%
172,959,664
56.0%
Total
123,800,000
100%
308,867,377
500
-
1,000
Total
Treasury
Face Value
(unit: won)
Meritz Financial
Information
%
Shares
%
Ritz Partners
Shares
%
3,000,000
100.0%
200,000
100.0%
2,000,000
100.0%
100%
3,000,000
100.0%
200,000
100.0%
2,000,000
100.0%
-
5,000
-
5,000
-
5,000
-
Transformation and Shareholder’
Shareholder’s structure
13
Splitting part of Meritz F&M subsidiary’
subsidiary’s stocks and Treasury, cash assets to establish Holding
Company, and after IPO, Holding Company will buy Meritz F&M’
F&M’s shares through tender offer to meet
non--listed 50%)
shareholders requirements for holding companies (listed 30%, non
1st step : Meritz F&M Investment Division Split
※ Exception
51%
Hanjin
Korindo
30.5 %
Securities
100%
Asset
Management
21.4%
2nd step : Tender offer for Meritz F&M
Major
Shareholder
F&M
21.4% + Investment in kind’
kind’s exchange
shares
Major
Shareholder
21.4%
100%
100%
Financial
Information
Ritz
Partners
Holding Co
100%
34.4%+α
34.4%+α
30.5%+β
30.5%+β
MBS
※ Treasury(13.0%), part of cash asset
Division
Holding
Company
※ Spin offs : After the split, distributing holding company’
company’s shares
proportionally to existing shareholders.
After -ex) Existing 10 shares (1%), Supposedly using 7:3 split method,
= Split to Meritz F&M 7(1%): Holding 3(1%)
100%
F&M
Securities
51%
Hanjin
Korindo
Asset
Management
100%
Financial
Information
Investment in
kind
(Tender offer
method)
100%
Ritz
Partners
100%
MBS
100%
Shin dong bang
Ltd
90%
Investment
Advisory
α : Participation of regular shareholder’
shareholder’s in tender offer
β : Acquisition of Meritz Securities’
Securities’ transferred cash
assets transferred
Asset Changes
14
(Unit: KRW Bn)
Bn)
STEP 1 : Division
(expected date: 2010.11.12)
Meritz F&M
New Corporate
Existing Corporate
Cash and Deposits
Securities
181.2
3,203.8
Cash
Securities
Meritz Securities
Loans
790.2
Meritz Asset Management
Tangible Assets
724.7
Meritz Financial
Information
Other Assets
Special Accounts
Assets
Total
STEP 2 : Investment in Kind
(expected date: 2011.5.18)
1,380.9
314.8
6,595.6
Ritz Partners
MBS
Meritz F&M (Existing Co)
Intangible Assets
33.2
261.3
171.2
11.8
3.4
8.3 6 months
of time
1.0
Required.
65.6
6.8
Financial Holdings
Cash
Securities
Meritz Securities
Meritz Asset Management
Meritz Financial
Information
Ritz Partners
MBS
Meritz F&M (Existing Co)
Tangible Assets
Intangible Assets
30.8
409.7
178.1
11.5
4.4
7.8
1.0
206.9
0.1
6.2
301.3
Total
Total
Investment In Kind
Meritz F&M’
F&M’s Shares
134.5
446.8
(*) Fluctuation in Subsidiary’s shares
are due to Business Guidance’s
change in 6 months
After divisiondivision- Capital Adequacy & ROE
15
■ Capital Adequacy
- Splitting part of Equity shares of Meritz F&M (its Subsidiaries), Treasury, Cash assets to establish the
holding company, Meritz F&M’s Asset and Capital will reduce, and therefore RBC and solvency ratio will
drop down. However, RBC will surpass its target goal of 170% and maintain 200% within two years.
Nov.2010 At Division Point
March 2011
Before
After
K-GAAP
K-IFRS
March 2012
(K(K-IFRS)
March 2013
(K(K-IFRS)
Solvency
Ratio
232.8%
155.2%
159.0%
148.5%
-
-
RBC
264.8%
183.4%
184.0%
173.1%
183.5%
200.0%
* From April 1st 2011, IFRS regulation will be applied: Then only the RBC is used
■ ROE
- First year after the division, ROE will drop to a certain degree, but after two years Holding company will
manifest higher ROE
After Division (FY2010)
FY2011
FY2012
Meritz
F&M plan
(FY2010)
Meritz
F&M
Holding
Co
F&M+
Holding Co
Meritz
F&M
Holding
Co
F&M+
Holding Co
Meritz
F&M
Holding
Co
F&M+
Holding Co
22.5%
25.1%
4.7%
18.7%
33.4%
29.3%
32.0%
30.2%
23.5%
27.6%
* Meritz F&M ROE : Adjusted ROE
Dividends and BPS
16
■ Dividends
- Rise in dividends per share as a result of decrease in shares and increase in payout ratio
(No dividends from Holding company at first year because of limited profit available for dividend)
After (FY2010)
FY2011
(Unit: KRW)
FY2012
Meritz F&M
(FY2010)
F&M
Holding
Co
F&M+
Holding
F&M
Holding
Co
F&M+
Holding
F&M
Holding
Co
F&M+
Holding
479.6
455.4
-
455.4
621.1
212.5
833.6
703.9
239.1
943.0
Dividends
per share
450
550
0
550
750
400
1,100
850
450
1,300
Adjusted
Dividends
450
385
0
385
525
120
645
595
135
730
Total
Dividends
(unit:KRW bn)
* Meritz F&M payout ratio : 30.0% / Holding Co : 20%
* Dividends : Meritz F&M: : 0.7 / Holding Co : 0.3
* Meritz F&M(FY2010) original dividends : 30% of payout ratio estimated to figures of FY2010 guidance
■ BPS
- BPS will continue to rise. Stock Price moves proportionally with BPS, therefore there are enough
capacity for F&M and Holding’s stock price to rise
(Unit: KRW)
Meritz F&M
original
plan
(FY2010)
7,445
After (FY2010)
FY2011
FY2012
Meritz F&M
Holdings
F&M +
Holdings
Meritz F&M
Holdings
F&M +
Holdings
Meritz F&M
Holdings
F&M +
Holdings
8,270
7,408
7,989
10,402
9,225
9,918
12,703
11,015
12,009
[Reference] Meritz F&M Financial Statement (After)
17
■ Estimated P/L
(Unit : KRW Bn)
FY2010
FY2011
FY2012
3,249.8
3,921.0
4,655.1
3,711.5
4,315.9
5,112.1
273.2
299.7
331.0
3,438.3
4,016.2
4,781.1
188.5
95.2
126.0
1,051.5
1,215.9
1,361.1
Refund of long-term insurance policies
755.9
914.1
1,125.5
Net operation Expenses
Increase in premium reserve for longterm savings-type
Net increase in policyholder’s dividend
reserve
Increase in catastrophe reserve
865.6
1,033.8
1,235.7
588.6
725.6
913.3
7.2
8.2
9.4
15.7
18.9
23.3
Underwriting Profit
(34.7)
4.5
(13.2)
Net investment income
237.2
261.7
312.4
Total operating profit
202.4
266.1
299.1
Net-operating income
(4.0)
(4.0)
(4.0)
198.4
262.1
295.1
48.0
57.7
64.9
150.4
204.5
230.2
Earned Premium
Premium Income
Premium paid
Net premium written
Unearned premium carried forward
Incurred loss
Net income before income tax
Income Tax
Net profit
[Appendix] Meritz F&M Financial Statement (After)
18
■ Estimated B/S
(Unit : KRW Bn)
Operating Assets
FY2010
FY2011
,
FY2012
5,084.4
6,057.5
7,179.2
739.3
732.9
726.8
4,345.2
5324.5
6,452.4
1,467.9
1,744.0
2,009.8
Accrued bonds
183.5
183.5
183.5
Security deposit
102.4
107.2
112.3
1,043.6
1,281.5
1,575.4
138.4
171.8
138.6
364.8
354.8
364.8
6,917.1
8,166.2
9,553.8
5,505.8
6,415.5
7,552.4
Catastrophe Reserve
135.1
154.0
177.3
Other liabilities
356.9
518.0
576.5
363.5
363.5
363.5
6,361.2
7,451.0
8,669.7
42.7
42.7
42.7
Retained Earnings
406.3
565.7
734.5
Other Capital
106.8
106.8
106.8
555.9
715.2
884.1
Real estate
Others
NonNon-operating Assets
Deferred Acquisition Cost
Others
Separate Account Assets
Total Assets
Policy Reserve
Separate Account Liabilities
Total Liabilities
Capital stock
Total shareholder’
shareholder’s equity
[Appendix] Meritz Financial Holding Co Financial Statement
■ Estimated P/L
(unit: KRW mn)
19
■ Estimated B/S
FY2010
FY2011
FY2012
(unit: KRW mn)
FY2011
FY2012
3,196.9
1,000.0
1,000.0
27,675.3
58,235.6
67,870.1
4.6
5.5
6.4
623.3
487.3
351.3
31,500.2
59,728.5
69,227.9
Loan
-
3,971.8
3,037.6
1,011.4
Corporate tax payable
-
75.3
114.7
102.0
-
Deferred tax liabilities
1,091.7
1,091.7
1,091.7
Total liability
1,091.7
5,138.8
4,244.0
-
109.8
193.8
Capital stocks
1,915.6
2,768.2
2,768.2
314.3
785.1
817.6
Capital surplus
30,875.8
43,346.4
43,346.4
Total operating
Profit
1,371.5
10,933.3
12,680.5
Capital adj
(5,064.1)
(5,064.1)
(5,064.1)
Profit before tax
1,371.5
10,933.3
12,680.5
1,309.7
1,309.7
1,309.7
1,371.5
12,229.5
22,623.7
-
75.3
114.7
30,408.5
54,589.7
64,983.9
1,371.5
10,858.0
12,565.7
3.6%
9.4%
6.5%
64.4%
97.5%
98.0%
Operating income
1,756.7
11,930.3
13,691.9
Equity-method
income
1,617.6
11,268.6
12,955.0
272
42.0
20.0
Earnings in Brandusage
111.9
619.7
716.8
Operating expense
385.2
996.9
Equity-method loss
70.9
Interest income
Interest expense
Management cost
Income tax (*)
Net income
(*) Tax may not occur as dividends income may not be included in taxable income
Cash and deposit
FY2010
Securities
Tangible assets
Intangible assets
Total assets
other comprehensive
income accumulated
Retained earnings
Total shareholder’
shareholder’s
equity
Liability portion
Holdings portion
Other similar cases
20
6 other companies market cap increased using same conversion method
method
- Our method : Spin offs and both holding and
- 6 companies : Hanjin Marine, Kolon, Young-won Trade, KISCO Holdings, Humax, KC Green Holdings
■ Changes in market cap after division
Before
Hanjin Marine
15,243
After
9,988
2,326.3
Hanjin Marine
Holdings
200.0
218.5
247.8
1,778.0
1,966.9
2,574.1
16.6%
29.0%
68.9%
167.2
160.2
165.1
4.6%
0.2%
3.3%
Kolon
172.7
193.8
187.0
Kolon Industry
771.0
720.9
911.5
Total
943.7
914.7
1,098.5
-5.5%
-8.4%
10.0%
160.6
161.5
165.1
-4.7%
-4.2%
-2.0%
G/R
G/R
KOSPI
KOSPI
1,685.59
After
6 months
1,748.4
KOSPI
Kolon
After
1 month
1,578.0
G/R
1,599.52
After
Hanjin Marine
Total
KOSPI
(unit : bn,
bn, p)
G/R
* Paid-in capital increase due from kind contribution is not reflected
21
■ Changes in Market Capital after division
(unit : bn,
bn, p)
Before
Young won
Trade
KOSPI
KISCO
Holdings
KOSPI
5,866
1,390.07
5,544
1,493.92
After
After
After
1 month
After
6 months
Young-won Trade
Holdings
213.7
227.0
346.9
Young-won Trade
340.0
317.5
400.6
Total
553.7
544.5
747.7
G/R
-5.6%
-7.2%
27.4%
KOSPI
153.5
159.2
160.2
G/R
10.4%
14.5%
15.3%
KISCO Holdings
150.9
52.2
140.1
Korea Iron and
stell
468.8
160.2
442.5
계
619.7
212.4
582.6
G/R
11.8%
-61.7%
5.1%
KOSPI
144.9
96.9
123.7
G/R
-9.4%
-39.4%
-22.6%
* Paid-in capital increase due from kind contribution is not reflected
Agenda
22
Ⅰ. Why do we need to convert
Ⅱ. Conversion Method
Ⅲ. Conversion Effect
Ⅳ. Scheduled Date
Advantage in entering new biz in aspect of capital raising and investment affordability 23
Investment affordability of KRW350bn by reinstatement of Meritz Fire’
Fire’s investment affordability
and raising capital of holding company. Advantage in aspect of capital raising in the case of
entering into new business through joint venture.
- opportunity costs : KRW8.45bn (capital raising by issuing subordinated
subordinated bonds : KRW130bn )
Direct Investment and J. Venture
Group investment affordability
Holdings
150
130
Fire
Securities
Domestic Credit
Domestic Credit
J/V
J/V
10
Before
Annuity
OnOn-line ins.
Saving Bank
Domestic Credit
Fire
150
Securities
KRW160bn
70
Holding s
219%
Entering into New Biz
KRW 350bn
After
※ interest for issuing subordinated bonds : 6.5%
- New biz
J/V
Opportunity to expand new biz according to the ease regulation for
for Ins. Holdings24
24
As Ins. Holdings allowed to have nonnon-financial company , there are opportunities to enter into nonnonnon--financial company for providing customer
financial business for new business or to establish non
services in Group
Insurance Holdings
(O)
(O)
30%(50%)
Subsidiary
Insurance Company
(O)
(O)
20%(40%)
30%(50%)
Financial company
(X)
(O)
Non financial company
(O)
(X)
(O)
30%(50%)
30%(50%)
20%(40%)
20%(40%)
Exc. Bank, ins.
Financial C. savings, Investment
N.Financial C.
Financial C. N.Financial C.
Financial C. N.Financial C.
Granddaughter
Incl. relevant
com., securities
Exc. Bank, other ins. Exc. approved company
company with
(X) by insurance Act. (O)
(X)
(X)
(O)
(O)
(O) financing business
(O)
100%
Great Grand Financial C. N.Financial C.
daughter
Exc. Bank, other ins.
100%
100%
100%
Financial C. N.Financial C. Financial C. N.Financial C.
Exc. Bank, ins.
savings, Investment
com., securities
※ %-listed company, (%)(%)-unlisted company
minimum requirement for retention shares
Incl. relevant
company with
financing business
100%
Financial C. N.Financial C.
Incl. relevant
company with
financing business
(particular rules for ins. Holdings’
Holdings’ dominance on subsidiary comapny
(the regulation for Financial holding company §25))
Synergy effect - customer information share
25
Allowed to share customer information for the purpose of business
business with holding company according
to the law of financial holding company. Creation of various values
values by combined customer
information and strategic development on customer segmentation.
Improvement of profit synergy through making use of the customer information among subsidiaries
for various sales operation and enhancement of brand values by group
group joint marketing
(Unit : KRW bn)
FY2010 FY2011 FY2012
Effect of
Customer
information share
Assumption
Fire
- Customer DB : 81,000
persons
(Customer DB of
Securities)
0.2
0.3
0.3
0.8
• Sales ratio by TM with auto ins. DB: 2.79%(By Securities DB)
• Package sales ratio with auto and long term : 7.8%
• Ratio having over 2 insurance : 30.93%
• Prem. per person : KRW1.1M, cross sales profit: 15.4%
Securities
- Customer DB :
2,675,920 persons
(Fire Customer DB)
0.4
1
1.1
2.5
• Account open ratio : 1% (Bain&Company’s consulting :0.6%)
• Profit per account KRW41,197, depositary asset KRW26.2M
Fire
Effect of
joint
Marketing
Total
Profit by
cross sales
Trust fees
1.5
0.5
4.2
1.5
5.0
1.7
10.7
3.7
• Securities having Holdings recorded 2.47% higher results
than market in trust fees during FY01~FY04
• Weighted average ratio in contributed profit during
FY04~FY08 : 78.7%
• Securities having Holdings recorded 10.7% higher results
than market during FY01~FY04
• Weighted average ratio in contributed profit during
FY04~FY08 : 78.7%
Securities
Broking fees
Total
• Shinhan life recorded 9.1% higher growth rate than market
average during FY04~FY08 after having holdings
→ applied 2% point increase given the branch nos.
• Incremental profit ratio : 8%
0.5
1.8
2.3
4.6
3.1
8.8
10.4
22.3
Nb) cross sales profit = incremental u/w profit ratio 9.8%+ incremental investment profit ratio 5.6%(FY2009),
incremental u/w profit ratio = 1-(incurred loss ratio 75.5%+ sales costs ratio 14.7%)
Growth opportunity of integrated distribution channel
26
Synergy effect by the growth of integrated distribution channel and the influx of external customer
will be improved dramatically according to C.D. Channel’
Channel’ frenetic pace of development
I.D Channel’
Channel’s customer nos. by year
Internal
External
Customer Customers
FY2010
2,958
11,831
Synergy effect by the influx of external customer
FY2011
Total
Incr.
Sales / Prem. /
custome Account Deposito
nos.
r nos.
ry assets
14,789
FY2011
8,366
33,465
56,620
FY2012
18,592
74,366
149,577
FY2013
26,338
105,352
281,268
FY2014
31,718
126,873
439,859
Fire
FY2012
profit
Prem. /
Incr.
Sales /
customer Account Depositor
nos.
y assets
nos.
Profit
note 1)
11,831
364
1.9
0.3
33,465
1,029
5.5
1.21
Securities 11,831
118
31
0.04
33,465
335
88
0.15
482
32.9
0.34
33,465
1,364
93.5
1.36
Total
11,831
Note 1) applied sales growth rate for new accounts in FY11 (Fire 25.1%, Securities
7.3% FY11→FY12 Sales growth rate)
※ the influx of external customer will be plus factor in Group joint marketing (internal : external=20%:80%)
- Sales ratio by TM with Auto ins. DB : 2.79%, sales by on-line auto ins.
- Package sales ratio with auto and long term : 7.8%
- Ratio of having over 2 accounts among existing customers : 30.9%
- premium per person : KRW71,000 (average premium per person)
※ Customer nos. by year mean new customer
Management efficiency through focusing on core competence
27
Synergy effect by strategy share, redundant resource reduction and
and enforcement of specialty through
changing to the management by customer, products and divisions (horizontal
(horizontal structure) from the
management by subsidiaries (vertical structure)
(Unit : KRW bn)
Integrated
purchase
Cycle
Large
Repetition
Group total
FY2010
FY2011
FY2012
5.22
20.67
24.25
Savings
-
0.41
0.49
Customer service
7.13
7.48
7.84
Education
4.17
4.44
4.66
HR
0.015
0.016
0.020
Sub-total
11.31
11.93
12.52
Savings
-
0.24
0.25
Redundant
-
10 person
12 person
Savings
-
0.75
0.95
-
1.4
1.69
Expendable/propertied
Shared
Service
Resource
relocation
Size
Total Savings
※ Integrated purchase and cost of labor: FY2010-0,FY2011~FY2012 – saving 2%, raise in wage 5.5% , minimal resource relocation
Estimated Synergy for FY2010 ~ FY2012
28
Generating synergy by group joint marketing, increase of cross sales
sales and customer information share
after holding company. Particularly, Fire and Securities are expected
expected to achieve synergy in profit and
cost savings
(Unit : KRW bn)
Synergy
Profit
Aspect
Customer
information
share
0.6
1.3
1.6
Total
Synergy by company
3.5
Common (3.1,12.0%)
Marketing
Cost
FY2010 FY2011 FY2012
(Unit : KRW bn)
Resource
redundancy
소 계
2.5
7.6
9.2
19.3
-
1.4
1.7
3.1
3.1
10.3
12.5
25.9
Fire
(11.7, 45.2%)
Securities
(11.1, 42.8%)
Comparison of group financial statement after holding company
29
Expected to achieve 42% growth in Asset and 75% in net profit within
within 2 years after changing into
holding company by strategic business plan
Total asset (KRW Tn)
Tn)
C
a
pi
t
al
FY2007
Capital
(Unit : KRW bn)
bn)
Asset
Liability
Net worth
Net income
Profit
Ratio
Synergy
Asset
Ratio
6,884.8
6,015.8
869.0
95.5
-
Net Income (Krw
(Krw bn)
bn)
42%
75%
Liab.
Liab.
FY2008
7,801.4
6,976.4
825.0
44.4
-
FY2009
(before)
10,427.8
9,301.6
1,126.2
186.9
-
주1) Estimated group business plan for FY2010 ~ FY2012
FY2010
FY2011
FY2012
13,562.0
12,222.6
1,339.5
206.6
3,1
1.5%
42.8
0.3%
17,096.2
15,239.6
1,856.6
305.5
10.2
3.3%
122.8
0.72%
19,318.3
16,997.0
2,321.3
361.9
12.4
3.4%
149.2
0.77%
Against net income
Against total asset
Agenda
30
Ⅰ. Why do we need to convert
Ⅱ. Conversion Method
Ⅲ. Conversion Effect
Ⅳ. Scheduled Date
Schedule date
Main Task
31
※ Scheduled data can vary depending on application approval time
Year/Month
Year/Month
2010
1
2
3
4
5
6
7
2011
8
9
10 11 12
1
1. Preparation
1st Step
May~Aug
2. Preparation for division
3. Board resolution of financial
holding company
4. Financial holding’s preliminary
application and approval
(2010. 5. 19(Wed))
5. Board resolution for division
2nd Step
6. Shareholders’ meeting for
division
Aug~Dec
7. Division
8. Apply and approval of financial
holdings
3rd Step
9. Request re-listing of holding
company and IPO
10. Preparatory procedures for
kind contribution
4th Step
Mar~June
11. Board resolution for tender
offer and new shares issued
12. Proceed tender offer
13. Follow-up procedures after the
completion of tender offer
Establish
Holding
company
2
3
4
5
6