South Korea’s JB Financial Group Co. will exchange stocks with its subsidiary Kwangju Bank Co. for full ownership in the regional lender that provides financial services in mainly Gwangju and South Jeolla Province.

The equity exchange decision comes after JB Financial Group acquired a 56.97 percent of stake in Kwangju Bank from Korea Deposit Insurance Corporation in 2014 to become its largest shareholder. The latest stock exchange will allow JB Financial Group to own full stake in Kwangju Bank.

According to JB Financial Group, it will exchange stocks with Kwangju Bank in a ratio of 1 to 1.8814503. The exchange is slated for Oct. 9 before the listing of new shares on Oct. 26.

An unnamed official from JB Financial Group said that incorporating Kwangju Bank as a fully-owned subsidiary will enhance management efficiency and create business synergy with JB Financial Group. It will also ultimately improve corporate value.

JB Financial Group currently has five subsidiaries - Jeonbuk Bank, Kwangju Bank, JB Capital Co., JB Asset Management Co., and Cambodia Phnom Penh Commercial Bank. The Jeolla Province-based financial group raised 88.1 billion won ($78.2 million) in consolidated net income in the first quarter of this year ended March, up 24.8 percent from the same period a year ago, despite a slump in regional economy due to the sale of Korea’s second-largest tiremaker Kumho Tire Co. and shutdown of GM Korea’s manufacturing plant in Gunsan.

In a recent report, KB Securities Co. estimated that JB Financial Group’s key subsidiaries have posted solid growth in the second quarter ended June and left its target price unchanged at 8,000 won.

Shares of JB Financial Group ended up 6.89 percent at 6,050 won on Friday.

By Chung Joo-won and Lee Eun-joo

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