Go to contents

Merger talks underway between Kookmin, H&CB

Posted December. 15, 2000 19:45,   


Goldman Sachs and ING Group, large shareholders of Kookmin Bank and Housing & Commercial Bank (H&CB), are in talks on a possible merger, it was officially confirmed Friday.

As Shinhan Bank earlier unveiled a plan to acquire Cheju Bank and incorporate it into a Shinhan-led financial holding company to be set up in late March, restructuring of the banking sector is expected to accelerate.

Obstacles remain, however, as the labor union of Cheju Bank is threatening to launch a strike beginning Monday to protest the deal and the unions of Kookmin and H&CB also vowed a joint struggle against the envisaged merger. Making matters worse, the Korea Financial Trade Union is also planning to begin a general strike from Dec. 28.

Kim Sang-Hoon, president of Kookmin Bank, confirmed Friday that Goldman Sachs and the ING Group approved the merger plan and now are engaged in working-level negotiations.

A high-ranking official of the Financial Supervisory Service (FSS) also said that Kim declared a halt to the merger talks with H&CB under pressure from the labor union. But as foreign shareholders approved the plan, the merger will be pursued. The official made clear that the talks are being led by large shareholders, not the presidents of the banks. President Kim will reportedly attempt to convince the labor union to accept a merger.

An official of the Financial Supervisory Commission (FSC) said the proposed merger between Kookmin and H&CB is a touchstone for determining the success of banking sector restructuring. He predicted that if the merger is realized, it would also speed up negotiations on the Hanvit and Korea Exchange Bank merger.

Kim Jung-Tae, president of H&CB, stressed that the merger would be made on an equal basis. He said that H&CB has expertise in mortgage loans, while Kookmin is competitive in household financing. The merger of the two banks would thus create a synergy effect in the credit-card business, he said, adding that he would do his best to persuade the labor union to consent to the merger plan.