ING, Kookmin to discuss ING unit stake-source

By Kim Yeon-hee

SEOUL, March 9 (Reuters) - South Korea's Kookmin Bank is set to negotiate to sell a stake in an insurance unit of ING Groep NV (ING.AS) back to the Dutch firm, a source close to the talks said on Friday, a deal which could end their strategic tie-ups.

Kookmin 060000.KS (KB.N), the country's top lender, owns a 20 percent stake in unlisted ING Life Insurance Korea Ltd., or 1.4 million shares with a book value of 117.84 billion won

($124.5 million). The life insurance unit ranks fourth in South Korea, after three top domestic players.

But the South Korean lender has to reduce its holding in the life insurer to below 15 percent by the end of 2007, complying with regulators' conditions after it bought half of a small-sized domestic life insurance firm in 2004.

"Kookmin will start the talks soon. It is thinking about selling more than 5 percent stake in the insurance company," the source told Reuters by telephone, asking not to be named.

Depending on the conditions, Kookmin may sell off its whole shareholding in ING Life, another source close to Kookmin had told Reuters earlier this year.

ING (ING.N) holds a 4 percent stake in Kookmin after it bought shares in the former H&CB in 1999, which Kookmin absorbed in 2001.

The Dutch financial group also owns 49 percent of KB Life Insurance Co. and 20 percent of KB Asset Management, in which Kookmin holds the remainder of shares, respectively.

But business relations between the two financial services firms started being loosened, after ING opened its wholly-owned asset management unit in South Korea in late 2006.

((Reporting by Kim Yeon-hee, editing by Keiron Henderson; yeonhee.kim@reuters.com; Reuters Messaging: yeonhee.kim.reuters.com@reuters.net;+82-2-3704-5646)) Keywords: ING KOOKMIN/STAKE

(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nSEO3802