Kookmin, H&CB to sign merger pact

Kookmin Bank and H&CB will sign an agreement to determine the terms of their merger and the name of the integrated bank at the end of March after undergoing inspections on their debts and assets, it was announced Tuesday.

A committee pushing for the merger between Kookmin Bank and H&CB (headed by Kim Byoung-Joo) held a news conference at its headquarters in Youido, central Seoul, and said that the inspections on their debts and assets will be completed by March 18. The banks are expected to sign the main contract at the end of March.

According to the committee, the banks will summon shareholders¡¯ meetings to approve the deal on April 30 and the merger project will be wrapped up as scheduled by June 30.

The biggest issue concerning the terms of the merger, said committee member Choi Bom-Soo, was that the ratio of equity swaps will be determined based on share prices on Dec. 23, when the two banks exchanged memorandums of understanding (MOU), with the results of inspections on their debts and assets taken into account.

However, the committee said that even before the merger, customers of both banks will not be subject to the individual credit ceiling for the time being and will be allowed to use automatic teller machines (ATM) at both banks. The two banks¡¯ interest rates will be unified and measures will be taken to exempt commission charges on transactions between the two banks.

Kim Seung-Ryun srkim@donga.com