Finda Pursues Daewon Savings Bank Acquisition with JB Financial Backing

Finda, a loan comparison platform in which JB Financial Group holds a second-largest stake, is pursuing the acquisition of Daewon Savings Bank headquartered in Gyeongju, North Gyeongsang Province, sources confirmed. Market analysts say JB Financial's financial support will be inevitable if Finda is to normalize the savings bank and expand operations after the acquisition.

According to financial industry sources on May 11, Finda has recently been discussing merger and acquisition matters with a domestic accounting firm to acquire Daewon Savings Bank.

Finda's move to acquire a savings bank comes as the company needs new revenue sources amid continuing losses. Founded in September 2015, Finda operates a non-face-to-face loan brokerage platform as its core business. The company posted its first profit in 2021, about two years after launching its application, but began recording losses in 2022 and has been unable to escape the red since then. According to Finda, the company's retained earnings showed a deficit of approximately 51.7 billion won in 2024. Total equity stands at about 37.87 billion won.

This has raised doubts within JB Financial about whether Finda can independently acquire and manage a savings bank. Daewon Savings Bank had total assets of 3.5 billion won as of the end of September last year and recorded cumulative losses of 600 million won through the third quarter of last year. The bank has capital of 100 million won and a substandard-and-below loan ratio of 8.7%.

This is why speculation has emerged that JB Financial would provide direct or indirect management support even if Finda acquires Daewon Savings Bank. JB Financial currently does not own a savings bank, making this an opportunity to indirectly operate one through Finda. A senior financial industry official familiar with JB Financial's situation said, "If Finda acquires it with its own capital, there would be no problem, but if JB Financial makes an indirect investment, the damage would fall entirely on JB Financial's shareholders and customers." The official added, "This is an abnormal structure where shareholders bear the risks while Finda, a management-friendly entity, reaps the rewards."

In July 2023, JB Financial invested 47 billion won in Finda's Series C round alongside 500 Global. At that time, JB Financial Holdings purchased 5% and Jeonbuk Bank 10%, totaling a 15% stake, making it the second-largest shareholder after Finda CEO Lee Hye-min. JB Financial holds the right to nominate two non-executive directors to Finda. A financial industry source said, "Given that the two companies are connected through equity stakes and this involves a savings bank acquisition, Finda would have shared opinions and sought advice from its major shareholder JB Financial."

In response, JB Financial stated, "As a major shareholder, we are broadly discussing potential cooperation in the digital finance sector, but nothing has been finalized regarding the acquisition of any specific financial institution or financial support." Finda explained, "We are examining various possibilities in the process of reviewing strategic options for expanding diverse financial services, but nothing specific has been finalized."

Meanwhile, dissatisfaction with board operations is growing within JB Financial. At the shareholders' meeting held in March last year, JB Financial abruptly raised the director compensation limit from 3.6 billion won to 5 billion won. JB Financial Chairman Kim Ki-hong received 3.78 billion won in compensation, the highest among financial holding company chairmen. The agenda for the shareholders' meeting scheduled for the 26th of this month also sets the compensation limit at 5 billion won, unchanged from last year.

The issue is that among the 11 directors, nine outside directors and one other non-standing director receive fixed stipends. The benefits of the increased compensation limit are concentrated solely on Chairman Kim, the only inside director and representative director. A financial industry source said, "The board, which should oversee the appropriateness of fund management, has instead become a rubber stamp that approves the chairman's high salary and turns a blind eye to preferential investments." The source added, "Finda's move to acquire a savings bank can also be seen as having a board that has lost its oversight function as its backdrop."