[THE INVESTOR] NongHyup Capital, a subsidiary of South Korea’s leading banking group NongHyup Financial Group, has become the second-largest shareholder of a financial leasing firm in China in a bid to make a foray into the fast-growing financial leasing market, the company said on Aug. 5.

NongHyup Capital bought a 29.82 stake in China Co-op Group International Leasing in a deal worth 85 million yuan (US$12.77 million).

Under the deal, the Seoul-based company has the right to appoint a director to the board and a put option as a financial investor.

 

The leasing firm’s parent China Co-op Group signed a memorandum of understanding with NongHyup Financial Group for a range of joint ventures in financial services including internet banking and insurance in China in January this year.

“The purchase of shares is a milestone for the joint business to be run by NongHyup Financial and China Co-Op Group and it is the first collaboration between Asia’s leading cooperative financial institutions,” NongHyup Financial Chairman & CEO Kim Yong-hwan said.

The deal came as China‘s financial leasing market is flourishing, bolstered by the government’s bold policy support to boost the real economy.

China’s financial leasing market is expected to hit 5 trillion yuan during the first half of 2016 to become the world’s largest, surpassing that of the US.

By Park Han-na (hnpark@heraldcorp.com">hnpark@heraldcorp.com)