The board of KB Financial Group Inc., South Korea's second-largest banking group by assets, has approved a long-protracted takeover of LIG Insurance Co. for 645 billion won ($585 million), officials said Wednesday.

The amount is for a 19.47 percent stake in the country's No. 4 non-life insurer and is lower than the 685 billion won price the two parties agreed to in June when they first signed the takeover deal. KB Financial had demanded the price be slashed, citing LIG's poor earnings.

The two parties have been in negotiations over the price since the Financial Services Commission approved the deal in December.

"The heads of KB Financial and LIG Group had talks about the price in a meeting last month. Since the meeting, negotiations have gained speed," a KB Financial official said, asking not to be named.

KB Financial has longed to buy LIG Insurance as part of its efforts to beef up its non-banking business. Its flagship Kookmin Bank accounted for 88 percent of the group's net profit and 75 percent of its total assets last year.

Shares of KB Financial fell 2.19 percent to close at 38,050 won on the Seoul bourse on Wednesday, with the benchmark KOSPI edging up 0.07 percent. Its board meeting ended after the market closed. (Yonhap)