Shinhan Bank and Kor Am Bank have agreed on merger in principle, and negotiations are in progress.
Coalition between commercial banks is becoming popular, as shareholders of Hana Bank and Korea First Bank are also meeting together to promote merger again after it was thought to be dissipated. Such trend is analyzed as the second `Big Bang` in banking circles.
Vice-president Choi Young-Hwi of Shinhan Financial Group Co., Ltd. confirmed on the merger on the 11th saying, We have chosen an U.S. investment bank, JP Morgan, as an advisory firm, and are negotiating for merger with Kor Am Banks large shareholder, Carlyle.
Last December-standard total assets of Shinhan and Kor Am Banks are 62 trillion won and 35.3 trillion won, respectively. Therefore, total assets will reach 100 trillion after merging, springing up to be No.2 after Kookmin Bank.
Shinhans stockholders requested Kor Am Bank to discontinue with the plan of issuing 22 million shares (worth 200 million dollar) of Depositary Receipt (DR) until June for capital expansion. If the capital amounts increase, the work of evaluating Kor Am Banks actual value becomes difficult.
Carlyle has been evaluating that among domestic banks, Shinhan Bank most suits the business structure of Kor Am Bank, and is also known to have been proceeding the merger behind the scenes. However, Kor Am Banks president Hah Young-Gu denied, Its not true, avoiding concrete comments.
Meanwhile after visiting president Kim Seung-Yoo of Hana Bank on the 10th, Korea First Banks large shareholder Newbridge also agreed on the principle that the merger is to be promoted.
There is no change in the principle to promote coalition between banks in order to grow big, explained Hana Bank.
In the securities market on the day, as expectations about the merger were strongly reflected, Shinhans stock price rose by 6.4 Per Cent and Kor Ams by 4.7 Per Cent.