Hanwha Life headquarters in Yeouido, Seoul / Courtesy of Hanwha Life

Hanwha Life will get a 40 percent stake in Nobu Bank in Indonesia, under a plan to expand into Southeast Asia and leap as a global financial group.

The life insurer announced that its extraordinary board meeting on Tuesday approved the Indonesia investment, in which it will get a 40 percent stake in Nobu Bank currently held by Indonesia's Lippo Group.

The investment is part of Hanwha's plan to leap from the life and general insurance business to banking in Indonesia, getting closer to its goal of becoming a "Global Integrated Financial Group." It chose Indonesia, which has both a growing economy and population, as a major base for expanding into the Southeast Asian market.

Founded in 1990, Nobu Bank is a mid-sized local bank, ranking within the top 30 by assets which totaled 2.3 trillion won ($1.68 billion) as of the end of 2023. It is part of Lippo Group, the sixth-largest conglomerate in Indonesia, which operates in various business sectors including finance, real estate and retail, and has strong brand recognition locally.

The bank operates in 119 locations and employs more than 1,200 staff as of 2023, specializing in personal mortgage loans and working capital loans for small and medium-sized enterprises. It has been noted for maintaining capital adequacy and growth even during the pandemic on strong branch operations.

Hanwha Life President and chief global officer Kim Dong-won / Courtesy of Hanwha Life

Behind the deal is the effort of Hanwha Life President and Chief Global Officer (CGO) Kim Dong-won, who has actively led the company's expansion into the global market since assuming the role of CGO in February last year. Based on his extensive global network, he had a crucial discussion with Lippo Group CEO John Riady at the Davos Forum in January regarding the investment and potential strategies for cooperation between the two companies. The two have been fostering collaborative partnership for years, which includes Hanwha Life Indonesia's investment in Lippo General Insurance in March last year.

The life insurer said it plans to integrate its digital expertise with Lippo Group's knowhow in banking operations, to swiftly bolster its footing in the industry. It will especially focus on creating a hybrid channel that enhances traditional in-person channels with digital banking, spreading a mobile-based business environment.

"Hanwha Life has already maintained a leading position in the domestic market, but accelerating our global strategy is essential to ensure continuous growth," Hanwha Life Vice Chairman and CEO Yeo Seung-joo said.

The investment will be finalized after the two companies sign a contract and the regulatory authorities in both countries grant approval.