Hana Financial Says It May Sell New Shares; Stock Declines

Oct. 5 (Bloomberg) -- Prudential Financial Inc., the second-biggest U.S. life insurer, said it’s studying whether to sell its brokerage and fund management businesses in South Korea.

The company is exploring options including a possible sale of either or both Prudential Investment & Securities Co. and Prudential Asset Management Co., Newark, New Jersey-based Prudential said in a statement today.

Prudential, which acquired the Seoul-based, securities and asset management units in 2004 from state-run Korea Deposit Insurance Corp., is seeking to exit part of its business in the nation after the government allowed banks and securities firms to engage in each other’s businesses, leading to an increase in competition.

The law is forcing industry participants to “make a choice for survival in Korea, which is one of the most dynamic markets,” said Woo Jae Ryong, head of the Wealth Management Research Institute at Tong Yang Securities Co. in Seoul. “They should become a big player or target a niche market as a small player.”

The insurer bought 80 percent of Prudential Investment for 355.5 billion won ($303 million) in February 2004. The remaining 20 percent was purchased in January 2008 for an unspecified amount, according to July 1 regulatory filings in South Korea.

Prudential said on Sept. 22 it’s looking for acquisitions in Japan and reiterated it may fund deals with debt or equity issues. Vice Chairman Mark Grier said on Sept. 22 the company would be conservative in funding acquisitions.

Profit

Prudential reported second-quarter net income of $163 million, its best profit in a year, as the stock market rebound let the insurer reduce the amount of money it set aside to protect savers from asset declines.

Prudential Investment, formerly known as Hyundai Investment & Securities Co., had an 11 billion won net loss in the year ended March 31, compared with a 101.9 billion won profit the previous year.

Prudential owns 99.8 percent of the Korean asset management company, which used to be one of the nation’s top three asset managers. Prudential Asset Management now manages 7.4 trillion won of assets, the 15th largest as of Sept. 30, according to Asset Management Association of Korea’s Web site.

The asset management company had 6.77 billion won of net income in the year ended March, according to a financial regulator’s statement on June 2.

The 10 biggest of 63 fund managers in Korea control 65 percent of the nation’s industry, according to a Financial Supervisory Service’s statement on June 1.

Prudential’s life insurance business in South Korea won’t be affected, the statement said today.