conversion to meritz financial holding companyir.meritzfire.com/ir/upload/holding company...

Conversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding CompanyConversion to Meritz Financial Holding Company

June 2010June 2010June 2010June 2010June 2010June 2010June 2010June 2010

1111AgendaAgendaAgendaAgenda

I. Why do we need to convertI. Why do we need to convertI. Why do we need to convertI. Why do we need to convert

Ⅱ. Conversion Method

Ⅲ. Conversion Effect

Ⅳ. Scheduled Date

2222The need to create synergy to secure revenueThe need to create synergy to secure revenueThe need to create synergy to secure revenueThe need to create synergy to secure revenue----based business and based business and based business and based business and maintain stable market position maintain stable market position maintain stable market position maintain stable market position

under the current group business lineunder the current group business lineunder the current group business lineunder the current group business line

Domestic NonDomestic NonDomestic NonDomestic Non----life insurance, securities, life insurance, securities, life insurance, securities, life insurance, securities,

asset management positioning matrixasset management positioning matrixasset management positioning matrixasset management positioning matrixComparison with other industriesComparison with other industriesComparison with other industriesComparison with other industries

(Source: Financial Statistic Information, FY09 3Q Public data, Unit-bn KRW)

SecuritiesSecuritiesSecuritiesSecurities

M/SM/SM/SM/SShareShareShareShare’’’’s s s s

equityequityequityequityAssetsAssetsAssetsAssets

MeritzMeritzMeritzMeritz 1.3% 529.5 1,991.8

Top 5 Top 5 Top 5 Top 5 AvgAvgAvgAvg 7.8% 2,450.2 13,147.8

GAPGAPGAPGAP -6.4% -1,920.6 -11,156.0

Asset ManagementAsset ManagementAsset ManagementAsset Management



MeritzMeritzMeritzMeritz 0.2% 7.8 8.1

Top 5 Top 5 Top 5 Top 5 AvgAvgAvgAvg 8.6% 207.0 247.8

GAPGAPGAPGAP -8.3% -199.1 -239.7

※ Based on 12 non-life insurance (Including Kyobo direct)

LIG

Samsung F&M

DongbuF&M

HyundaiMarine

MeritzF&M

DaewooSecurites

SamsungSecuties

Korea Investment

MeritzSecurities

Mirae assetManagement

KB AssetManagement

Meritz Assetmanagement

-15.0%

-5.0%

5.0%

15.0%

25.0%

35.0%

-0.1% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

M/S

RO

E

In order to overcome weaknesses of subsidiaries under Meritz groIn order to overcome weaknesses of subsidiaries under Meritz groIn order to overcome weaknesses of subsidiaries under Meritz groIn order to overcome weaknesses of subsidiaries under Meritz group, the creation plan up, the creation plan up, the creation plan up, the creation plan of recapitalization and synergy consolidation is in need to raisof recapitalization and synergy consolidation is in need to raisof recapitalization and synergy consolidation is in need to raisof recapitalization and synergy consolidation is in need to raise the necessary e the necessary e the necessary e the necessary conditionsconditionsconditionsconditions

NonNonNonNon----life Insurancelife Insurancelife Insurancelife Insurance



MeritzMeritzMeritzMeritz 8.2% 612.9 5,800.8

Top 5 Top 5 Top 5 Top 5 AvgAvgAvgAvg 18.1% 1,822.2 13,999.6

GAPGAPGAPGAP -9.9% -1,209.3 -8,198.8

(Source: Financial Statistic Information, FY09 3Q Public data)

3333Need of diversification of financial business to provide comprehNeed of diversification of financial business to provide comprehNeed of diversification of financial business to provide comprehNeed of diversification of financial business to provide comprehensive financial serviceensive financial serviceensive financial serviceensive financial service

Enhance customerEnhance customerEnhance customerEnhance customer’’’’s loyalty through ones loyalty through ones loyalty through ones loyalty through one----stop comprehensive financial service, and in stop comprehensive financial service, and in stop comprehensive financial service, and in stop comprehensive financial service, and in

order to secure new engines for sustainable growth of the group,order to secure new engines for sustainable growth of the group,order to secure new engines for sustainable growth of the group,order to secure new engines for sustainable growth of the group, diversification of diversification of diversification of diversification of

financial business is needed. financial business is needed. financial business is needed. financial business is needed.

PaymentPaymentPaymentPayment

DepositDepositDepositDeposit

LoanLoanLoanLoan

SecuritySecuritySecuritySecurity

Asset Asset Asset Asset

ManagementManagementManagementManagement

InsuranceInsuranceInsuranceInsurance

Variable Variable Variable Variable

InsuranceInsuranceInsuranceInsurance

Financial Financial Financial Financial

DerivativeDerivativeDerivativeDerivative

Credit Credit Credit Credit

InformationInformationInformationInformation

TrustTrustTrustTrust

Foreign Foreign Foreign Foreign

ExchangeExchangeExchangeExchange

Operating Operating Operating Operating

AssetsAssetsAssetsAssets

ResearchResearchResearchResearch

ConsultingConsultingConsultingConsulting

Function of Financial serviceFunction of Financial serviceFunction of Financial serviceFunction of Financial serviceNon-life

Financial

Investment

Asset

Management

Sales

professional

bankbankbankbankLife Life Life Life

insuranceinsuranceinsuranceinsurance

Savings Savings Savings Savings

bankbankbankbankLoanLoanLoanLoan

Credit Credit Credit Credit

informationinformationinformationinformation

Operating businessOperating businessOperating businessOperating business

NonNonNonNon----operating businessoperating businessoperating businessoperating business

Function of financial service and business lineFunction of financial service and business lineFunction of financial service and business lineFunction of financial service and business line

4444Need of proactive measure for division of manufacturing and saleNeed of proactive measure for division of manufacturing and saleNeed of proactive measure for division of manufacturing and saleNeed of proactive measure for division of manufacturing and sales of financial productss of financial productss of financial productss of financial products

---- In order to proactively respond to introduction of exclusive saIn order to proactively respond to introduction of exclusive saIn order to proactively respond to introduction of exclusive saIn order to proactively respond to introduction of exclusive sales company for the les company for the les company for the les company for the

sales of comprehensive financial products and sales of comprehensive financial products and sales of comprehensive financial products and sales of comprehensive financial products and development of Integrateddevelopment of Integrateddevelopment of Integrateddevelopment of Integrated----type channel, type channel, type channel, type channel,

It needs to strengthen the It needs to strengthen the It needs to strengthen the It needs to strengthen the competivenesscompetivenesscompetivenesscompetiveness of the groupof the groupof the groupof the group’’’’ssss sales company.sales company.sales company.sales company.

---- Financial holding company which can share customer DB will beneFinancial holding company which can share customer DB will beneFinancial holding company which can share customer DB will beneFinancial holding company which can share customer DB will benefit to take off the fit to take off the fit to take off the fit to take off the

sales company.sales company.sales company.sales company.

< Exclusive sales company of financial product < Exclusive sales company of financial product < Exclusive sales company of financial product < Exclusive sales company of financial product

will be introduced iwill be introduced iwill be introduced iwill be introduced in 2010>n 2010>n 2010>n 2010>

☞☞☞☞ Sales of any kind of financial products are possibleSales of any kind of financial products are possibleSales of any kind of financial products are possibleSales of any kind of financial products are possible

☞☞☞☞ Maintain independent status segregated from manufacturerMaintain independent status segregated from manufacturerMaintain independent status segregated from manufacturerMaintain independent status segregated from manufacturer

☞☞☞☞ Provide comprehensive financial service through Provide comprehensive financial service through Provide comprehensive financial service through Provide comprehensive financial service through

visiting solicitor (=financial product sales plaza)visiting solicitor (=financial product sales plaza)visiting solicitor (=financial product sales plaza)visiting solicitor (=financial product sales plaza)

Purpose of new Purpose of new Purpose of new Purpose of new

• Measure to segregation ofMeasure to segregation ofMeasure to segregation ofMeasure to segregation of

manufacture and salesmanufacture and salesmanufacture and salesmanufacture and sales

• Sales of any kind of financial Sales of any kind of financial Sales of any kind of financial Sales of any kind of financial

products are possibleproducts are possibleproducts are possibleproducts are possible

• Comparison among financial Comparison among financial Comparison among financial Comparison among financial

productsproductsproductsproducts

• Reformation of Financial Reformation of Financial Reformation of Financial Reformation of Financial

consumer protection systemconsumer protection systemconsumer protection systemconsumer protection system

bankbankbankbank

NonNonNonNon----

lifelifelifelife

LifeLifeLifeLife

insuranceinsuranceinsuranceinsurance


investmentinvestmentinvestmentinvestment

cardcardcardcard

loanloanloanloan


ManageManageManageManage----

mentmentmentment

....

....

....

IndividualIndividualIndividualIndividual

customercustomercustomercustomer

CorporateCorporateCorporateCorporate

customercustomercustomercustomer

VIPVIPVIPVIP

....

....

....

Sales Sales Sales Sales

subsidiarysubsidiarysubsidiarysubsidiary

55555555

Meritz Fire

Securities InvestmentFinancialFinancialFinancialFinancial

Information servInformation servInformation servInformation servRitz Partners

30.5%30.5%30.5%30.5% 100%100%100%100% 100%100%100%100% 100%100%100%100%

• Total Investment affordability : KRW155.7 bn

• Amount invested : KRW143.1 bn

(invested to subsidiaries)

• Remaining amount to invest : KRW 12.6 bn

No affordability to invest

• Investment affordability

- KRW100 bn ~ 150 bn

Corporate governance and investment affordabilityCorporate governance and investment affordabilityCorporate governance and investment affordabilityCorporate governance and investment affordability

Major shareholder

21.4%21.4%21.4%21.4%

Limit of diversification of business line Limit of diversification of business line Limit of diversification of business line Limit of diversification of business line

There is limit to provide comprehensive financial service as theThere is limit to provide comprehensive financial service as theThere is limit to provide comprehensive financial service as theThere is limit to provide comprehensive financial service as the amounts of investment amounts of investment amounts of investment amounts of investment

affordability under the current corporate governance are KRW110affordability under the current corporate governance are KRW110affordability under the current corporate governance are KRW110affordability under the current corporate governance are KRW110 bnbnbnbn ~ 160 ~ 160 ~ 160 ~ 160 bnbnbnbn. . . .

66666666Need to establish the independent management systemNeed to establish the independent management systemNeed to establish the independent management systemNeed to establish the independent management system

FireFireFireFire

SecuritySecuritySecuritySecurity InvestmentInvestmentInvestmentInvestment ITITITIT HanjinHanjinHanjinHanjin KorindoKorindoKorindoKorindo

30.5%30.5%30.5%30.5% 100%100%100%100% 100%100%100%100% 100%100%100%100%

Structure of group governanceStructure of group governanceStructure of group governanceStructure of group governance

Ritz Ritz Ritz Ritz

51%51%51%51%

Shin dong bangShin dong bangShin dong bangShin dong bang

HwagiHwagiHwagiHwagi investinvestinvestinvest

100%100%100%100%

90%90%90%90%

unlisted (Hong unlisted (Hong unlisted (Hong unlisted (Hong kongkongkongkong))))

unlisted (China)unlisted (China)unlisted (China)unlisted (China)

unlisted (Indonesia)unlisted (Indonesia)unlisted (Indonesia)unlisted (Indonesia)

As Meritz Fire govern the subsidiaries directly, there is a possAs Meritz Fire govern the subsidiaries directly, there is a possAs Meritz Fire govern the subsidiaries directly, there is a possAs Meritz Fire govern the subsidiaries directly, there is a possibility that the risks of subsidiary can ibility that the risks of subsidiary can ibility that the risks of subsidiary can ibility that the risks of subsidiary can

spread into spread into spread into spread into F&MF&MF&MF&M’’’’ssss business. Therefore change of the structure of governance is inbusiness. Therefore change of the structure of governance is inbusiness. Therefore change of the structure of governance is inbusiness. Therefore change of the structure of governance is in need for the need for the need for the need for the

independent management of subsidiaries.independent management of subsidiaries.independent management of subsidiaries.independent management of subsidiaries.

7777Control TowerControl TowerControl TowerControl Tower’’’’s management is in need to improve efficiencys management is in need to improve efficiencys management is in need to improve efficiencys management is in need to improve efficiency

In order to improve groupIn order to improve groupIn order to improve groupIn order to improve group’’’’s efficiency, Control Towers efficiency, Control Towers efficiency, Control Towers efficiency, Control Tower’’’’s s s s strategic rolestrategic rolestrategic rolestrategic role: restructuring,: restructuring,: restructuring,: restructuring,

expansion of new business,expansion of new business,expansion of new business,expansion of new business, the managing rolethe managing rolethe managing rolethe managing role: prevent risk, trimming down : prevent risk, trimming down : prevent risk, trimming down : prevent risk, trimming down

overlapping resources, overlapping resources, overlapping resources, overlapping resources, the operating rolethe operating rolethe operating rolethe operating role: strengthening business through customers, : strengthening business through customers, : strengthening business through customers, : strengthening business through customers,

channels, products is in needchannels, products is in needchannels, products is in needchannels, products is in need

Control TowerControl TowerControl TowerControl TowerControl TowerControl TowerControl TowerControl Tower

F&MF&MF&MF&M

SecuritiesSecuritiesSecuritiesSecurities Asset Asset Asset Asset

managementmanagementmanagementmanagement

Ritz PartnersRitz PartnersRitz PartnersRitz Partners

FinancialFinancialFinancialFinancial


Management roleManagement roleManagement roleManagement roleManagement roleManagement roleManagement roleManagement role Strategic roleStrategic roleStrategic roleStrategic roleStrategic roleStrategic roleStrategic roleStrategic role Operating roleOperating roleOperating roleOperating roleOperating roleOperating roleOperating roleOperating role

88888888Improvement of efficiency through focusing on core competenceImprovement of efficiency through focusing on core competenceImprovement of efficiency through focusing on core competenceImprovement of efficiency through focusing on core competence

FireFireFireFire


InvestmentInvestmentInvestmentInvestment


IT ServiceIT ServiceIT ServiceIT Service

Outsourcing Outsourcing Outsourcing Outsourcing

Core functionCore functionCore functionCore function Common functionCommon functionCommon functionCommon function

• business planbusiness planbusiness planbusiness plan

• HRHRHRHRㆍㆍㆍㆍITITITITㆍㆍㆍㆍCS planCS planCS planCS plan

• MarketingMarketingMarketingMarketingㆍㆍㆍㆍSupportingSupportingSupportingSupporting

• Investment/Loan Investment/Loan Investment/Loan Investment/Loan

• Product Product Product Product

• Risk managementRisk managementRisk managementRisk management

• ActuaryActuaryActuaryActuary

• ComplianceComplianceComplianceCompliance

• AuditAuditAuditAudit

• IRIRIRIR

• Finance management Finance management Finance management Finance management

• AccountingAccountingAccountingAccounting

• Advertising Advertising Advertising Advertising

• System operationSystem operationSystem operationSystem operation

• IT maintenanceIT maintenanceIT maintenanceIT maintenance

• PurchasingPurchasingPurchasingPurchasing

• RentRentRentRent

• Call centerCall centerCall centerCall center

• HRHRHRHR• SalarySalarySalarySalary

• Legal serviceLegal serviceLegal serviceLegal service

• AccountingAccountingAccountingAccounting

• Real estate Real estate Real estate Real estate

• RecoveryRecoveryRecoveryRecovery

HoldingsHoldingsHoldingsHoldings

---- Brand managingBrand managingBrand managingBrand managing

Shared Service CenterShared Service CenterShared Service CenterShared Service Center

---- Call centerCall centerCall centerCall center

Outsourcing companyOutsourcing companyOutsourcing companyOutsourcing company

-Maintenance, Rent, Maintenance, Rent, Maintenance, Rent, Maintenance, Rent, Purchasing, EducationPurchasing, EducationPurchasing, EducationPurchasing, Education

Improvement of management efficiency by integrating the common rImprovement of management efficiency by integrating the common rImprovement of management efficiency by integrating the common rImprovement of management efficiency by integrating the common roles to relevant subsidiaries oles to relevant subsidiaries oles to relevant subsidiaries oles to relevant subsidiaries

while each company focusing on core competence while each company focusing on core competence while each company focusing on core competence while each company focusing on core competence


Ⅰ. Why do we need to convert

ⅡⅡⅡⅡ. Conversion Method. Conversion Method. Conversion Method. Conversion Method


Ⅳ. Scheduled Date

10101010Meritz Financial Group as of March 31Meritz Financial Group as of March 31Meritz Financial Group as of March 31Meritz Financial Group as of March 31stststst 2010201020102010

* * * * 종금증권종금증권종금증권종금증권: : : : 종금종금종금종금, , , , 증권증권증권증권 합산합산합산합산 수치수치수치수치 (e)(e)(e)(e)

(KRW :(KRW :(KRW :(KRW :BnBnBnBn)))) Meritz F&MMeritz F&MMeritz F&MMeritz F&MMeritz Meritz Meritz Meritz


Meritz Asset Meritz Asset Meritz Asset Meritz Asset


Meritz Meritz Meritz Meritz




AssetAssetAssetAsset 6,035.0 3,635.2 12.7 7.8 9.5

LiabilityLiabilityLiabilityLiability 5,355.0 2,956.8 0.5 5.2 0.2

CapitalCapitalCapitalCapital 680.0 678.4 12.2 2.6 0.9

Capital Capital Capital Capital

StocksStocksStocksStocks61.9 308.9 15.0 1.0 10.0

Net IncomeNet IncomeNet IncomeNet Income 140.4 24.1 -1.0 0.3 -0.5

11111111Meritz Financial CompanyMeritz Financial CompanyMeritz Financial CompanyMeritz Financial Company’’’’s Share Structure (2010. 4. 1) s Share Structure (2010. 4. 1) s Share Structure (2010. 4. 1) s Share Structure (2010. 4. 1)

* Meritz Securities stake : includes special account (767,430 shares, 0.2%)

* Market Cap: Based on 2010.5.24

• Capital : 10.0

Meritz SecuritiesMeritz SecuritiesMeritz SecuritiesMeritz Securities Meritz Asset Meritz Asset Meritz Asset Meritz Asset ManagementManagementManagementManagement

Meritz Financial Meritz Financial Meritz Financial Meritz Financial InformationInformationInformationInformation


Meritz F&MMeritz F&MMeritz F&MMeritz F&M

Major Major Major Major

ShareholderShareholderShareholderShareholder

21.4%21.4%21.4%21.4%

•Treasury: 13.9%

30.71%30.71%30.71%30.71% 100%100%100%100% 100%100%100%100% 100%100%100%100%

• Financial Co•Financial Co • Non-Financial Co •Financial Co

•Capital: 15.0 • Capital: 1.0• Capital : 308.9

• Market Cap : 307.3

• Market Cap : KRW 953.3 bn

* Meritz F&M Treasury : Includes Treasury fund(1,110,550 shares, 0.9%)

•Capital Stocks: KRW61.9 bn

12121212

(Unit : (Unit : (Unit : (Unit :

Shares, %)Shares, %)Shares, %)Shares, %)

Meritz F&MMeritz F&MMeritz F&MMeritz F&M Meritz SecuritiesMeritz SecuritiesMeritz SecuritiesMeritz SecuritiesMeritz Asset Meritz Asset Meritz Asset Meritz Asset


Meritz Financial Meritz Financial Meritz Financial Meritz Financial

InformationInformationInformationInformationRitz PartnersRitz PartnersRitz PartnersRitz Partners

SharesSharesSharesShares %%%% SharesSharesSharesShares %%%% SharesSharesSharesShares %%%% SharesSharesSharesShares %%%% SharesSharesSharesShares %%%%


ShareholderShareholderShareholderShareholder26,500,725 21.4% 5,013,910 1.6%

Meritz F&MMeritz F&MMeritz F&MMeritz F&M - - 94,851,481 30.7% 3,000,000 100.0% 200,000 100.0% 2,000,000 100.0%

Related Related Related Related

CompaniesCompaniesCompaniesCompanies5,400,808 4.4% 17,955,144 5.8%

ESOPESOPESOPESOP 6,181,311 5.0% 14,135,077 4.6%

Total Total Total Total

TreasuryTreasuryTreasuryTreasury17,232,157 13.9% 3,952,101 1.3%

TreasuryTreasuryTreasuryTreasury 16,121,607 13.0% 3,952,101 1.3%

Treasury Treasury Treasury Treasury

FundFundFundFund1,110,550 0.9% - -

Favorable Favorable Favorable Favorable

ShareShareShareShare55,315,001 44.7% 135,907,713 44.0%

OthersOthersOthersOthers 68,484,999 55.3% 172,959,664 56.0%

TotalTotalTotalTotal 123,800,000 100% 308,867,377 100% 3,000,000 100.0% 200,000 100.0% 2,000,000 100.0%

Face ValueFace ValueFace ValueFace Value

(unit: won)(unit: won)(unit: won)(unit: won)500 - 1,000 - 5,000 - 5,000 - 5,000 -

Meritz Financial CompanyMeritz Financial CompanyMeritz Financial CompanyMeritz Financial Company’’’’s Share Structure (2010. 4. 1) s Share Structure (2010. 4. 1) s Share Structure (2010. 4. 1) s Share Structure (2010. 4. 1)

13131313Transformation and ShareholderTransformation and ShareholderTransformation and ShareholderTransformation and Shareholder’’’’s structures structures structures structure

Splitting part of Meritz F&M subsidiarySplitting part of Meritz F&M subsidiarySplitting part of Meritz F&M subsidiarySplitting part of Meritz F&M subsidiary’’’’s stocks and Treasury, cash assets to establish Holding s stocks and Treasury, cash assets to establish Holding s stocks and Treasury, cash assets to establish Holding s stocks and Treasury, cash assets to establish Holding

Company, and after IPO, Holding Company will buy Meritz Company, and after IPO, Holding Company will buy Meritz Company, and after IPO, Holding Company will buy Meritz Company, and after IPO, Holding Company will buy Meritz F&MF&MF&MF&M’’’’ssss shares through tender offer to meet shares through tender offer to meet shares through tender offer to meet shares through tender offer to meet

shareholders requirements for holding companies (listed 30%, nonshareholders requirements for holding companies (listed 30%, nonshareholders requirements for holding companies (listed 30%, nonshareholders requirements for holding companies (listed 30%, non----listed 50%)listed 50%)listed 50%)listed 50%)

F&MF&MF&MF&M





Ritz Ritz Ritz Ritz

PartnersPartnersPartnersPartnersSecuritiesSecuritiesSecuritiesSecurities



Holding Holding Holding Holding

CompanyCompanyCompanyCompany

Holding CoHolding CoHolding CoHolding Co

AssetAssetAssetAsset




Ritz Ritz Ritz Ritz

PartnersPartnersPartnersPartnersSecuritiesSecuritiesSecuritiesSecurities



F&MF&MF&MF&M

Investment in Investment in Investment in Investment in

kindkindkindkind

(Tender offer (Tender offer (Tender offer (Tender offer

method)method)method)method)

21.4%21.4%21.4%21.4%

21.4%21.4%21.4%21.4%

21.4% + Investment in kind21.4% + Investment in kind21.4% + Investment in kind21.4% + Investment in kind’’’’s exchange s exchange s exchange s exchange

sharessharessharesshares

1111stststst step : Meritz F&M Investment Division Splitstep : Meritz F&M Investment Division Splitstep : Meritz F&M Investment Division Splitstep : Meritz F&M Investment Division Split 2222ndndndnd step : Tender offer for Meritz F&Mstep : Tender offer for Meritz F&Mstep : Tender offer for Meritz F&Mstep : Tender offer for Meritz F&M

30.5 %30.5 %30.5 %30.5 % 100%100%100%100% 100%100%100%100% 100%100%100%100%

※※※※ Treasury(13.0%), part of cash assetTreasury(13.0%), part of cash assetTreasury(13.0%), part of cash assetTreasury(13.0%), part of cash asset

DivisionDivisionDivisionDivision

30.5%+30.5%+30.5%+30.5%+ββββ

100%100%100%100% 100%100%100%100% 100%100%100%100%

34.4%+34.4%+34.4%+34.4%+αααα

αααα : Participation of regular shareholder: Participation of regular shareholder: Participation of regular shareholder: Participation of regular shareholder’’’’s in tender offer s in tender offer s in tender offer s in tender offer

ββββ : Acquisition of Meritz Securities: Acquisition of Meritz Securities: Acquisition of Meritz Securities: Acquisition of Meritz Securities’’’’ transferred cash transferred cash transferred cash transferred cash

assets transferredassets transferredassets transferredassets transferred

※※※※ Spin offs : After the split, distributing holding companySpin offs : After the split, distributing holding companySpin offs : After the split, distributing holding companySpin offs : After the split, distributing holding company’’’’s shares s shares s shares s shares

proportionally to existing shareholders.proportionally to existing shareholders.proportionally to existing shareholders.proportionally to existing shareholders.

After After After After ----ex) Existing 10 shares (1%), Supposedly using 7:3 split method,ex) Existing 10 shares (1%), Supposedly using 7:3 split method,ex) Existing 10 shares (1%), Supposedly using 7:3 split method,ex) Existing 10 shares (1%), Supposedly using 7:3 split method,

= Split to Meritz F&M 7(1%): Holding 3(1%)= Split to Meritz F&M 7(1%): Holding 3(1%)= Split to Meritz F&M 7(1%): Holding 3(1%)= Split to Meritz F&M 7(1%): Holding 3(1%)

MBS

HanjinHanjinHanjinHanjin

KorindoKorindoKorindoKorindo

51%51%51%51%

※※※※ ExceptionExceptionExceptionException

Shin dong bang Shin dong bang Shin dong bang Shin dong bang

LtdLtdLtdLtd

Investment Investment Investment Investment

AdvisoryAdvisoryAdvisoryAdvisory

HanjinHanjinHanjinHanjin

KorindoKorindoKorindoKorindo

100%100%100%100%51%51%51%51%

90%90%90%90%

MBS

100%100%100%100%

100%100%100%100%

14141414Asset ChangesAsset ChangesAsset ChangesAsset Changes

Cash and DepositsCash and DepositsCash and DepositsCash and Deposits 181.2 181.2 181.2 181.2

SecuritiesSecuritiesSecuritiesSecurities 3,203.8 3,203.8 3,203.8 3,203.8

LoansLoansLoansLoans 790.2 790.2 790.2 790.2

Tangible AssetsTangible AssetsTangible AssetsTangible Assets 724.7 724.7 724.7 724.7

Other AssetsOther AssetsOther AssetsOther Assets 1,380.9 1,380.9 1,380.9 1,380.9

Special Accounts Special Accounts Special Accounts Special Accounts

AssetsAssetsAssetsAssets314.8 314.8 314.8 314.8

CashCashCashCash 33.2 33.2 33.2 33.2

SecuritiesSecuritiesSecuritiesSecurities 261.3 261.3 261.3 261.3

Meritz Securities 171.2

Meritz Asset Management 11.8

Meritz Financial Information 3.4

Ritz Partners 8.3

MBS 1.0

Meritz F&M (Existing Co) 65.6

Intangible AssetsIntangible AssetsIntangible AssetsIntangible Assets 6.86.86.86.8

Existing CorporateExisting CorporateExisting CorporateExisting Corporate New CorporateNew CorporateNew CorporateNew Corporate

TotalTotalTotalTotal 6,595.66,595.66,595.66,595.6

TotalTotalTotalTotal 301.3301.3301.3301.3


STEP 1 : DivisionSTEP 1 : DivisionSTEP 1 : DivisionSTEP 1 : Division

(expected date: 2010.11.12)(expected date: 2010.11.12)(expected date: 2010.11.12)(expected date: 2010.11.12)

STEP 2 : Investment in KindSTEP 2 : Investment in KindSTEP 2 : Investment in KindSTEP 2 : Investment in Kind

(expected date: 2011.5.18)(expected date: 2011.5.18)(expected date: 2011.5.18)(expected date: 2011.5.18)

Investment In KindInvestment In KindInvestment In KindInvestment In Kind

Meritz Meritz Meritz Meritz F&MF&MF&MF&M’’’’ssss SharesSharesSharesShares 134.5134.5134.5134.5

CashCashCashCash 30.8 30.8 30.8 30.8

SecuritiesSecuritiesSecuritiesSecurities 409.7 409.7 409.7 409.7

Meritz Securities 178.1

Meritz Asset Management 11.5

Meritz Financial

Information4.4

Ritz Partners 7.8

MBS 1.0

Meritz F&M (Existing Co) 206.9

Tangible AssetsTangible AssetsTangible AssetsTangible Assets

Intangible AssetsIntangible AssetsIntangible AssetsIntangible Assets

0.1

6.2

Financial Holdings Financial Holdings Financial Holdings Financial Holdings

TotalTotalTotalTotal 446.8446.8446.8446.8

6 months 6 months 6 months 6 months

of time of time of time of time

Required.Required.Required.Required.

(*) Fluctuation in Subsidiary’s shares

are due to Business Guidance’s

change in 6 months

(Unit: KRW (Unit: KRW (Unit: KRW (Unit: KRW BnBnBnBn))))

15151515After divisionAfter divisionAfter divisionAfter division---- Capital Adequacy & ROECapital Adequacy & ROECapital Adequacy & ROECapital Adequacy & ROE

* From April 1st 2011, IFRS regulation will be applied: Then only the RBC is used

■■■■ ROEROEROEROE

■■■■ Capital Adequacy Capital Adequacy Capital Adequacy Capital Adequacy


F&M planF&M planF&M planF&M plan

(FY2010)(FY2010)(FY2010)(FY2010)

After Division (FY2010)After Division (FY2010)After Division (FY2010)After Division (FY2010) FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012


F&MF&MF&MF&M


CoCoCoCo

F&M+F&M+F&M+F&M+



F&MF&MF&MF&M


CoCoCoCo

F&M+F&M+F&M+F&M+



F&MF&MF&MF&M


CoCoCoCo

F&M+F&M+F&M+F&M+


22.5% 25.1% 4.7% 18.7% 33.4% 29.3% 32.0% 30.2% 23.5% 27.6%

Nov.2010 At Division PointNov.2010 At Division PointNov.2010 At Division PointNov.2010 At Division Point March 2011March 2011March 2011March 2011 March 2012March 2012March 2012March 2012

(K(K(K(K----IFRS)IFRS)IFRS)IFRS)

March 2013March 2013March 2013March 2013

(K(K(K(K----IFRS)IFRS)IFRS)IFRS)BeforeBeforeBeforeBefore AfterAfterAfterAfter KKKK----GAAPGAAPGAAPGAAP KKKK----IFRSIFRSIFRSIFRS

Solvency Solvency Solvency Solvency

RatioRatioRatioRatio232.8% 155.2% 159.0% 148.5% - -

RBCRBCRBCRBC 264.8% 183.4% 184.0% 173.1% 183.5% 200.0%

- 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.

- First year after the division, ROE will drop to a certain degree, but after two years Holding company will

manifest higher ROE

* Meritz F&M ROE : Adjusted ROE

16161616Dividends and BPS Dividends and BPS Dividends and BPS Dividends and BPS

■■■■ BPSBPSBPSBPS

■■■■ Dividends Dividends Dividends Dividends

Meritz F&M Meritz F&M Meritz F&M Meritz F&M

original original original original

planplanplanplan

(FY2010)(FY2010)(FY2010)(FY2010)

After (FY2010)After (FY2010)After (FY2010)After (FY2010) FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Meritz F&MMeritz F&MMeritz F&MMeritz F&M HoldingsHoldingsHoldingsHoldingsF&M + F&M + F&M + F&M +

HoldingsHoldingsHoldingsHoldingsMeritz F&MMeritz F&MMeritz F&MMeritz F&M HoldingsHoldingsHoldingsHoldings

F&M + F&M + F&M + F&M +

HoldingsHoldingsHoldingsHoldingsMeritz F&MMeritz F&MMeritz F&MMeritz F&M HoldingsHoldingsHoldingsHoldings

F&M + F&M + F&M + F&M +


7,445 8,270 7,408 7,989 10,402 9,225 9,918 12,703 11,015 12,009


(FY2010)(FY2010)(FY2010)(FY2010)

After (FY2010)After (FY2010)After (FY2010)After (FY2010) FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

F&MF&MF&MF&MHolding Holding Holding Holding

CoCoCoCo

F&M+F&M+F&M+F&M+

HoldingHoldingHoldingHoldingF&MF&MF&MF&M


CoCoCoCo

F&M+F&M+F&M+F&M+

HoldingHoldingHoldingHoldingF&MF&MF&MF&M


CoCoCoCo

F&M+F&M+F&M+F&M+

HoldingHoldingHoldingHolding

Total Total Total Total

DividendsDividendsDividendsDividends(unit:KRW bn)

479.6 455.4 - 455.4 621.1 212.5 833.6 703.9 239.1 943.0

Dividends Dividends Dividends Dividends

per shareper shareper shareper share450 550 0 550 750 400 1,100 850 450 1,300

Adjusted Adjusted Adjusted Adjusted

DividendsDividendsDividendsDividends450 385 0 385 525 120 645 595 135 730

* Meritz F&M payout ratio : 30.0% / Holding Co : 20%

- 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

- 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)

* 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

(Unit: KRW)(Unit: KRW)(Unit: KRW)(Unit: KRW)

(Unit: KRW)(Unit: KRW)(Unit: KRW)(Unit: KRW)

17171717[Reference] Meritz F&M Financial Statement (After)[Reference] Meritz F&M Financial Statement (After)[Reference] Meritz F&M Financial Statement (After)[Reference] Meritz F&M Financial Statement (After)

■■■■ Estimated P/LEstimated P/LEstimated P/LEstimated P/L

(Unit : KRW Bn) FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Earned Premium 3,249.83,249.83,249.83,249.8 3,921.03,921.03,921.03,921.0 4,655.14,655.14,655.14,655.1

Premium Income 3,711.5 4,315.9 5,112.1

Premium paid 273.2 299.7 331.0

Net premium written 3,438.3 4,016.2 4,781.1

Unearned premium carried forward 188.5 95.2 126.0

Incurred loss 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 865.6 1,033.8 1,235.7

Increase in premium reserve for long-

term savings-type588.6 725.6 913.3

Net increase in policyholder’s dividend

reserve7.2 8.2 9.4

Increase in catastrophe reserve 15.7 18.9 23.3

Underwriting ProfitUnderwriting ProfitUnderwriting ProfitUnderwriting Profit (34.7)(34.7)(34.7)(34.7) 4.54.54.54.5 (13.2)(13.2)(13.2)(13.2)

Net investment incomeNet investment incomeNet investment incomeNet investment income 237.2 261.7 312.4

Total operating profitTotal operating profitTotal operating profitTotal operating profit 202.4202.4202.4202.4 266.1266.1266.1266.1 299.1299.1299.1299.1

Net-operating income (4.0) (4.0) (4.0)

Net income before income taxNet income before income taxNet income before income taxNet income before income tax 198.4198.4198.4198.4 262.1262.1262.1262.1 295.1295.1295.1295.1

Income Tax 48.0 57.7 64.9

Net profitNet profitNet profitNet profit 150.4150.4150.4150.4 204.5204.5204.5204.5 230.2230.2230.2230.2

18181818[Appendix][Appendix][Appendix][Appendix] Meritz F&M Financial Statement (After)Meritz F&M Financial Statement (After)Meritz F&M Financial Statement (After)Meritz F&M Financial Statement (After)

■■■■ Estimated B/SEstimated B/SEstimated B/SEstimated B/S

(Unit : KRW Bn) FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Operating AssetsOperating AssetsOperating AssetsOperating Assets 5,084.45,084.45,084.45,084.4 6,057.56,057.56,057.56,057.5 7,179.27,179.27,179.27,179.2

Real estate 739.3 732.9 726.8

Others 4,345.2 5324.5 6,452.4

NonNonNonNon----operating Assetsoperating Assetsoperating Assetsoperating Assets 1,467.91,467.91,467.91,467.9 1,744.01,744.01,744.01,744.0 2,009.82,009.82,009.82,009.8

Accrued bonds 183.5 183.5 183.5

Security deposit 102.4 107.2 112.3

Deferred Acquisition Cost 1,043.6 1,281.5 1,575.4

Others 138.4 171.8 138.6

Separate Account AssetsSeparate Account AssetsSeparate Account AssetsSeparate Account Assets 364.8364.8364.8364.8 354.8354.8354.8354.8 364.8364.8364.8364.8

Total AssetsTotal AssetsTotal AssetsTotal Assets 6,917.16,917.16,917.16,917.1 8,166.28,166.28,166.28,166.2 9,553.89,553.89,553.89,553.8

Policy Reserve 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

Separate Account Liabilities 363.5 363.5 363.5

Total LiabilitiesTotal LiabilitiesTotal LiabilitiesTotal Liabilities 6,361.26,361.26,361.26,361.2 7,451.07,451.07,451.07,451.0 8,669.78,669.78,669.78,669.7

Capital stock 42.7 42.7 42.7

Retained Earnings 406.3 565.7 734.5

Other Capital 106.8 106.8 106.8

Total shareholderTotal shareholderTotal shareholderTotal shareholder’’’’s equitys equitys equitys equity 555.9555.9555.9555.9 715.2715.2715.2715.2 884.1884.1884.1884.1

,,,,

1919191919191919[Appendix][Appendix][Appendix][Appendix] Meritz Financial Holding Co Financial StatementMeritz Financial Holding Co Financial StatementMeritz Financial Holding Co Financial StatementMeritz Financial Holding Co Financial Statement

■■■■ Estimated B/SEstimated B/SEstimated B/SEstimated B/S■■■■ Estimated P/LEstimated P/LEstimated P/LEstimated P/L

(unit: KRW mn) FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Cash and deposit 3,196.9 1,000.0 1,000.0

Securities 27,675.3 58,235.6 67,870.1

Tangible assets 4.6 5.5 6.4

Intangible assets 623.3 487.3 351.3

Total assetsTotal assetsTotal assetsTotal assets 31,500.231,500.231,500.231,500.2 59,728.559,728.559,728.559,728.5 69,227.969,227.969,227.969,227.9

Loan - 3,971.8 3,037.6

Corporate tax payable - 75.3 114.7

Deferred tax liabilities 1,091.7 1,091.7 1,091.7

Total liabilityTotal liabilityTotal liabilityTotal liability 1,091.71,091.71,091.71,091.7 5,138.85,138.85,138.85,138.8 4,244.04,244.04,244.04,244.0

Capital stocks 1,915.6 2,768.2 2,768.2

Capital surplus 30,875.8 43,346.4 43,346.4

Capital adj (5,064.1) (5,064.1) (5,064.1)

other comprehensive

income accumulated 1,309.7 1,309.7 1,309.7

Retained earnings 1,371.5 12,229.5 22,623.7

Total shareholderTotal shareholderTotal shareholderTotal shareholder’’’’s s s s

equityequityequityequity30,408.530,408.530,408.530,408.5 54,589.754,589.754,589.754,589.7 64,983.964,983.964,983.964,983.9

Liability portion 3.6% 9.4% 6.5%

Holdings portion 64.4% 97.5% 98.0%

(unit: KRW mn) FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Operating incomeOperating incomeOperating incomeOperating income 1,756.71,756.71,756.71,756.7 11,930.311,930.311,930.311,930.3 13,691.913,691.913,691.913,691.9

Equity-method

income1,617.6 11,268.6 12,955.0

Interest income 272 42.0 20.0

Earnings in Brand-

usage 111.9 619.7 716.8

Operating expenseOperating expenseOperating expenseOperating expense 385.2385.2385.2385.2 996.9996.9996.9996.9 1,011.41,011.41,011.41,011.4

Equity-method loss 70.9 102.0 -

Interest expense - 109.8 193.8

Management cost 314.3 785.1 817.6

Total operating Total operating Total operating Total operating

ProfitProfitProfitProfit1,371.51,371.51,371.51,371.5 10,933.310,933.310,933.310,933.3 12,680.512,680.512,680.512,680.5

Profit before taxProfit before taxProfit before taxProfit before tax 1,371.51,371.51,371.51,371.5 10,933.310,933.310,933.310,933.3 12,680.512,680.512,680.512,680.5

Income tax (*) - 75.3 114.7

Net incomeNet incomeNet incomeNet income 1,371.51,371.51,371.51,371.5 10,858.010,858.010,858.010,858.0 12,565.712,565.712,565.712,565.7

(*) Tax may not occur as dividends income may not be included in taxable income

20202020Other similar casesOther similar casesOther similar casesOther similar cases

(unit : (unit : (unit : (unit : bnbnbnbn, p), p), p), p)■■■■ Changes in market cap after division Changes in market cap after division Changes in market cap after division Changes in market cap after division

BeforeBeforeBeforeBeforeAfterAfterAfterAfter AfterAfterAfterAfter After After After After

1 month1 month1 month1 month

After After After After

6 months6 months6 months6 months

HanjinHanjinHanjinHanjin MarineMarineMarineMarine 15,243

Hanjin Marine 1,578.0 1,748.4 2,326.3

Hanjin Marine

Holdings

200.0 218.5 247.8

Total 1,778.0 1,966.9 2,574.1

G/R 16.6%16.6%16.6%16.6% 29.0%29.0%29.0%29.0% 68.9%68.9%68.9%68.9%

KOSPI 1,599.52KOSPI 167.2 160.2 165.1

G/R 4.6% 0.2% 3.3%

KolonKolonKolonKolon 9,988

Kolon 172.7 193.8 187.0

Kolon Industry 771.0 720.9 911.5

Total 943.7 914.7 1,098.5

G/R -5.5% -8.4% 10.0%10.0%10.0%10.0%

KOSPI 1,685.59KOSPI 160.6 161.5 165.1

G/R -4.7% -4.2% ----2.0%2.0%2.0%2.0%

6 other companies market cap increased using same conversion met6 other companies market cap increased using same conversion met6 other companies market cap increased using same conversion met6 other companies market cap increased using same conversion method hod hod hod

- Our method : Spin offs and both holding and

- 6 companies : Hanjin Marine, Kolon, Young-won Trade, KISCO Holdings, Humax, KC Green Holdings

* Paid-in capital increase due from kind contribution is not reflected

21212121

(unit : (unit : (unit : (unit : bnbnbnbn, p), p), p), p)■■■■ Changes in Market Capital after division Changes in Market Capital after division Changes in Market Capital after division Changes in Market Capital after division

BeforeBeforeBeforeBeforeAfterAfterAfterAfter AfterAfterAfterAfter After After After After

1 month1 month1 month1 month

AfterAfterAfterAfter

6 months6 months6 months6 months

Young wonYoung wonYoung wonYoung won

TradeTradeTradeTrade5,866

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%27.4%27.4%27.4%

KOSPI 1,390.07KOSPI 153.5 159.2 160.2

G/R 10.4% 14.5% 15.3%15.3%15.3%15.3%

KISCOKISCOKISCOKISCO

HoldingsHoldingsHoldingsHoldings5,544

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%5.1%5.1%5.1%

KOSPI 1,493.92KOSPI 144.9 96.9 123.7

G/R -9.4% -39.4% ----22.6%22.6%22.6%22.6%

* Paid-in capital increase due from kind contribution is not reflected




ⅢⅢⅢⅢ. Conversion Effect. Conversion Effect. Conversion Effect. Conversion Effect

Ⅳ. Scheduled Date

2323232323232323Advantage in entering new biz in aspect of capital raising andAdvantage in entering new biz in aspect of capital raising andAdvantage in entering new biz in aspect of capital raising andAdvantage in entering new biz in aspect of capital raising and investment affordability investment affordability investment affordability investment affordability

Group investment affordabilityGroup investment affordabilityGroup investment affordabilityGroup investment affordability

10101010

150150150150

KRW160bnKRW160bnKRW160bnKRW160bn

130130130130

150150150150

70707070

BeforeBeforeBeforeBefore AfterAfterAfterAfter

KRW 350bnKRW 350bnKRW 350bnKRW 350bn

219%219%219%219%

Holding s

Holding s

Holding s

Holding s

Investment affordability of KRW350bn by reinstatement of Meritz Investment affordability of KRW350bn by reinstatement of Meritz Investment affordability of KRW350bn by reinstatement of Meritz Investment affordability of KRW350bn by reinstatement of Meritz FireFireFireFire’’’’s investment affordability s investment affordability s investment affordability s investment affordability

and raising capital of holding company. Advantage in aspect of and raising capital of holding company. Advantage in aspect of and raising capital of holding company. Advantage in aspect of and raising capital of holding company. Advantage in aspect of capital raising in the case of capital raising in the case of capital raising in the case of capital raising in the case of

entering into new business through joint venture. entering into new business through joint venture. entering into new business through joint venture. entering into new business through joint venture.

---- opportunity costs : KRW8.45bn (capital raising by issuing suboropportunity costs : KRW8.45bn (capital raising by issuing suboropportunity costs : KRW8.45bn (capital raising by issuing suboropportunity costs : KRW8.45bn (capital raising by issuing subordinated bonds : KRW130bn )dinated bonds : KRW130bn )dinated bonds : KRW130bn )dinated bonds : KRW130bn )

Entering into New Biz


FireFireFireFire SecuritiesSecuritiesSecuritiesSecuritiesAnnuityAnnuityAnnuityAnnuity

OnOnOnOn----line ins.line ins.line ins.line ins.

Saving BankSaving BankSaving BankSaving Bank

Domestic CreditDomestic CreditDomestic CreditDomestic CreditDomestic CreditDomestic CreditDomestic CreditDomestic Credit Domestic CreditDomestic CreditDomestic CreditDomestic Credit

J/VJ/VJ/VJ/VJ/VJ/VJ/VJ/V J/VJ/VJ/VJ/V

Direct Investment and J. VentureDirect Investment and J. VentureDirect Investment and J. VentureDirect Investment and J. Venture

- New biz

※ interest for issuing subordinated bonds : 6.5%

Securitie

sSecuritie

sSecuritie

sSecuritie

sFireFireFireFire

2424242424242424Opportunity to expand new biz according to the ease regulation fOpportunity to expand new biz according to the ease regulation fOpportunity to expand new biz according to the ease regulation fOpportunity to expand new biz according to the ease regulation for Ins. Holdings or Ins. Holdings or Ins. Holdings or Ins. Holdings

As Ins. Holdings allowed to have nonAs Ins. Holdings allowed to have nonAs Ins. Holdings allowed to have nonAs Ins. Holdings allowed to have non----financial company , there are opportunities to enter into nonfinancial company , there are opportunities to enter into nonfinancial company , there are opportunities to enter into nonfinancial company , there are opportunities to enter into non----

financial business for new business or to establish nonfinancial business for new business or to establish nonfinancial business for new business or to establish nonfinancial business for new business or to establish non----financial company for providing customer financial company for providing customer financial company for providing customer financial company for providing customer

services in Group services in Group services in Group services in Group

Insurance HoldingsInsurance HoldingsInsurance HoldingsInsurance Holdings

Insurance CompanyInsurance CompanyInsurance CompanyInsurance Company

Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C.

Financial companyFinancial companyFinancial companyFinancial company Non financial companyNon financial companyNon financial companyNon financial company

(O)(O)(O)(O) (X)(X)(X)(X)

(O)(O)(O)(O)(O)(O)(O)(O)(O)(O)(O)(O)

(O)(O)(O)(O) (O)(O)(O)(O) (O)(O)(O)(O) (O)(O)(O)(O) (O)(O)(O)(O)

(O)(O)(O)(O)(O)(O)(O)(O) (O)(O)(O)(O)

(X)(X)(X)(X) (X)(X)(X)(X) (X)(X)(X)(X)

(X)(X)(X)(X)

30%(50%)

30%(50%)

100%

30%(50%) 20%(40%)

100% 100% 100% 100%

20%(40%)

20%(40%)

Exc. Bank, other ins.

Exc. Bank, ins.

savings, Investment

com., securities

Incl. relevant

company with

financing business

Exc. approved company

by insurance Act.

SubsidiarySubsidiarySubsidiarySubsidiary

GranddaughterGranddaughterGranddaughterGranddaughter

Great GrandGreat GrandGreat GrandGreat Grand

daughterdaughterdaughterdaughter

※※※※ %%%%----listed company, (%)listed company, (%)listed company, (%)listed company, (%)----unlisted company unlisted company unlisted company unlisted company

minimum requirement for retention sharesminimum requirement for retention sharesminimum requirement for retention sharesminimum requirement for retention shares(particular rules for ins. Holdings(particular rules for ins. Holdings(particular rules for ins. Holdings(particular rules for ins. Holdings’’’’ dominance on subsidiary dominance on subsidiary dominance on subsidiary dominance on subsidiary comapnycomapnycomapnycomapny

(the regulation for Financial holding company (the regulation for Financial holding company (the regulation for Financial holding company (the regulation for Financial holding company §§§§25))25))25))25))

30%(50%)

Exc. Bank, other ins. Exc. Bank, ins.

savings, Investment

com., securities

Incl. relevant

company with

financing business

Incl. relevant

company with

financing business

Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C. Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C.

Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C. Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C. Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C. Financial C.Financial C.Financial C.Financial C. N.FinancialN.FinancialN.FinancialN.Financial C.C.C.C.

2525252525252525

FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 TotalTotalTotalTotal AssumptionAssumptionAssumptionAssumption

Effect of

Customer

informat-

ion share

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

Effect of

joint

Marketing

FireProfit by

cross sales1.5 4.2 5.0 10.7

• 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%

Securit-

ies

Trust fees 0.5 1.5 1.7 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%

Broking fees 0.5 1.8 2.3 4.6

• Securities having Holdings recorded 10.7% higher results

than market during FY01~FY04

• Weighted average ratio in contributed profit during

FY04~FY08 : 78.7%

TotalTotalTotalTotal 3.13.13.13.1 8.88.88.88.8 10.410.410.410.4 22.322.322.322.3

(Unit : KRW bn)

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%)

Synergy effect Synergy effect Synergy effect Synergy effect ---- customer information sharecustomer information sharecustomer information sharecustomer information share

Allowed to share customer information for the purpose of businesAllowed to share customer information for the purpose of businesAllowed to share customer information for the purpose of businesAllowed to share customer information for the purpose of business with holding company according s with holding company according s with holding company according s with holding company according

to the law of financial holding company. Creation of various vto the law of financial holding company. Creation of various vto the law of financial holding company. Creation of various vto the law of financial holding company. Creation of various values by combined customer alues by combined customer alues by combined customer alues by combined customer

information and strategic development on customer segmentation. information and strategic development on customer segmentation. information and strategic development on customer segmentation. information and strategic development on customer segmentation.

Improvement of profit synergy through making use of the customerImprovement of profit synergy through making use of the customerImprovement of profit synergy through making use of the customerImprovement of profit synergy through making use of the customer information among subsidiaries information among subsidiaries information among subsidiaries information among subsidiaries

for various sales operation and enhancement of brand values by gfor various sales operation and enhancement of brand values by gfor various sales operation and enhancement of brand values by gfor various sales operation and enhancement of brand values by group joint marketing roup joint marketing roup joint marketing roup joint marketing

2626262626262626Growth opportunity of integrated distribution channel Growth opportunity of integrated distribution channel Growth opportunity of integrated distribution channel Growth opportunity of integrated distribution channel

Internal Internal Internal Internal

CustomerCustomerCustomerCustomer

External External External External

Customers Customers Customers Customers TotalTotalTotalTotal

FY2010 2,958 11,831 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

I.D ChannelI.D ChannelI.D ChannelI.D Channel’’’’s customer nos. by year s customer nos. by year s customer nos. by year s customer nos. by year

FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Incr. Incr. Incr. Incr.

customecustomecustomecustome

r nos.r nos.r nos.r nos.

Sales / Sales / Sales / Sales /

Account Account Account Account

nos.nos.nos.nos.

Prem. /Prem. /Prem. /Prem. /

DepositoDepositoDepositoDeposito

ry assetsry assetsry assetsry assets

profitprofitprofitprofit

Incr. Incr. Incr. Incr.

customer customer customer customer

nos.nos.nos.nos.

Sales / Sales / Sales / Sales /

Account Account Account Account

nos.nos.nos.nos.

Prem. /Prem. /Prem. /Prem. /

DepositorDepositorDepositorDepositor

y assetsy assetsy assetsy assets

ProfitProfitProfitProfitnote 1)note 1)note 1)note 1)

Fire 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

TotalTotalTotalTotal 11,83111,83111,83111,831 482482482482 32.932.932.932.9 0.340.340.340.34 33,46533,46533,46533,465 1,3641,3641,3641,364 93.593.593.593.5 1.361.361.361.36

Synergy effect by the influx of external customerSynergy effect by the influx of external customerSynergy effect by the influx of external customerSynergy effect by the influx of external customer

※ 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

Note 1) applied sales growth rate for new accounts in FY11 (Fire 25.1%, Securities

7.3% FY11→FY12 Sales growth rate)

Synergy effect by the growth of integrated distribution channel Synergy effect by the growth of integrated distribution channel Synergy effect by the growth of integrated distribution channel Synergy effect by the growth of integrated distribution channel and the influx of external customer and the influx of external customer and the influx of external customer and the influx of external customer

will be improved dramatically according to C.D. Channelwill be improved dramatically according to C.D. Channelwill be improved dramatically according to C.D. Channelwill be improved dramatically according to C.D. Channel’’’’ frenetic pace of development frenetic pace of development frenetic pace of development frenetic pace of development

2727272727272727Management efficiency through focusing on core competenceManagement efficiency through focusing on core competenceManagement efficiency through focusing on core competenceManagement efficiency through focusing on core competence

SizeSizeSizeSize Cycle Cycle Cycle Cycle Group totalGroup totalGroup totalGroup total

FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Integrated

purchase

Expendable/propertied Large Repetition 5.22 20.67 24.25

SavingsSavingsSavingsSavings ---- 0.410.410.410.41 0.490.490.490.49

Shared

Service

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


Resource

relocation

Redundant ---- 10 person 12 person


Total SavingsTotal SavingsTotal SavingsTotal Savings ---- 1.41.41.41.4 1.691.691.691.69

※ Integrated purchase and cost of labor: FY2010-0,FY2011~FY2012 – saving 2%, raise in wage 5.5% , minimal resource relocation

Synergy effect by strategy share, redundant resource reduction aSynergy effect by strategy share, redundant resource reduction aSynergy effect by strategy share, redundant resource reduction aSynergy effect by strategy share, redundant resource reduction and enforcement of specialty through nd enforcement of specialty through nd enforcement of specialty through nd enforcement of specialty through

changing to the management by customer, products and divisions (changing to the management by customer, products and divisions (changing to the management by customer, products and divisions (changing to the management by customer, products and divisions (horizontal structure) from the horizontal structure) from the horizontal structure) from the horizontal structure) from the

management by subsidiaries (vertical structure) management by subsidiaries (vertical structure) management by subsidiaries (vertical structure) management by subsidiaries (vertical structure)

(Unit : KRW bn)

2828282828282828Estimated Synergy for FY2010 ~ FY2012 Estimated Synergy for FY2010 ~ FY2012 Estimated Synergy for FY2010 ~ FY2012 Estimated Synergy for FY2010 ~ FY2012

SynergySynergySynergySynergy AspectAspectAspectAspect FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 TotalTotalTotalTotal

ProfitProfitProfitProfit

Customer

information

share

0.6 1.3 1.6 3.5

Marketing 2.5 7.6 9.2 19.3

CostCostCostCostResource

redundancy- 1.4 1.7 3.1

소소소소 계계계계 3.13.13.13.1 10.310.310.310.3 12.512.512.512.5 25.925.925.925.9

(Unit : KRW bn)

Synergy by companySynergy by companySynergy by companySynergy by company

SecuritiesSecuritiesSecuritiesSecurities(11.1, 42.8%)(11.1, 42.8%)(11.1, 42.8%)(11.1, 42.8%)FireFireFireFire

(11.7, 45.2%)(11.7, 45.2%)(11.7, 45.2%)(11.7, 45.2%)

Common (3.1,12.0%)Common (3.1,12.0%)Common (3.1,12.0%)Common (3.1,12.0%)

Generating synergy by group joint marketing, increase of cross sGenerating synergy by group joint marketing, increase of cross sGenerating synergy by group joint marketing, increase of cross sGenerating synergy by group joint marketing, increase of cross sales and customer information share ales and customer information share ales and customer information share ales and customer information share

after holding company. Particularly, Fire and Securities are exafter holding company. Particularly, Fire and Securities are exafter holding company. Particularly, Fire and Securities are exafter holding company. Particularly, Fire and Securities are expected to achieve synergy in profit and pected to achieve synergy in profit and pected to achieve synergy in profit and pected to achieve synergy in profit and

cost savings cost savings cost savings cost savings

(Unit : KRW bn)

CCCC

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주1) Estimated group business plan for FY2010 ~ FY2012

(Unit : KRW (Unit : KRW (Unit : KRW (Unit : KRW bnbnbnbn)))) FY2007 FY2007 FY2007 FY2007 FY2008 FY2008 FY2008 FY2008 FY2009 FY2009 FY2009 FY2009

(before) (before) (before) (before) FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Asset 6,884.8 7,801.4 10,427.8 13,562.0 17,096.2 19,318.3

Liability 6,015.8 6,976.4 9,301.6 12,222.6 15,239.6 16,997.0

Net worth 869.0 825.0 1,126.2 1,339.5 1,856.6 2,321.3

Net income 95.5 - 44.4 186.9 206.6 305.5 361.9

Synergy

Profit - - - 3,1 10.2 12.4

Ratio - - - 1.5% 3.3% 3.4% Against net income

Asset - - - 42.8 122.8 149.2

Ratio - - - 0.3% 0.72% 0.77% Against total asset

Total asset (KRW Total asset (KRW Total asset (KRW Total asset (KRW TnTnTnTn)))) 42%42%42%42% Net Income (Net Income (Net Income (Net Income (KrwKrwKrwKrw bnbnbnbn)))) 75%75%75%75%

Comparison of group financial statement after holding companyComparison of group financial statement after holding companyComparison of group financial statement after holding companyComparison of group financial statement after holding company

Expected to achieve 42% growth in Asset and 75% in net profit wiExpected to achieve 42% growth in Asset and 75% in net profit wiExpected to achieve 42% growth in Asset and 75% in net profit wiExpected to achieve 42% growth in Asset and 75% in net profit within 2 years after changing into thin 2 years after changing into thin 2 years after changing into thin 2 years after changing into

holding company by strategic business plan holding company by strategic business plan holding company by strategic business plan holding company by strategic business plan

CapitalCapitalCapitalCapital LiabLiabLiabLiab....





ⅣⅣⅣⅣ.... Scheduled DateScheduled DateScheduled DateScheduled Date

31313131

Main Task Year/MonMain Task Year/MonMain Task Year/MonMain Task Year/Monthththth2010201020102010 2011201120112011

1111 2222 3333 4444 5555 6666 7777 8888 9999 10101010 11111111 12121212 1111 2222 3333 4444 5555 6666

1111stststst StepStepStepStep

May~AugMay~AugMay~AugMay~Aug

1. Preparation

2. Preparation for division

3. Board resolution of financial

holding company

4. Financial holding’s preliminary

application and approval

2222ndndndnd StepStepStepStep

Aug~DecAug~DecAug~DecAug~Dec

5. Board resolution for division

6. Shareholders’ meeting for

division

7. Division

8. Apply and approval of financial

holdings

3333rdrdrdrd StepStepStepStep9. Request re-listing of holding

company and IPO

4444thththth StepStepStepStep

Mar~JuneMar~JuneMar~JuneMar~June

10. Preparatory procedures for

kind contribution

11. Board resolution for tender

offer and new shares issued

12. Proceed tender offer

13. Follow-up procedures after the

completion of tender offer

(2010. 5. 19(Wed))(2010. 5. 19(Wed))(2010. 5. 19(Wed))(2010. 5. 19(Wed))

Establish Establish Establish Establish


companycompanycompanycompany

※ Scheduled data can vary depending on application approval timeSchedule dateSchedule dateSchedule dateSchedule date

conversion to meritz financial holding companyir.meritzfire.com/ir/upload/holding company...

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