Go to contents

“Banks Merger, the Next is Shinhan Bank-Koram Bank”

Posted August. 06, 2002 21:57,   

한국어

Owing to the Seoul Bank Acquisition of Hana Bank, the banking industries got started in reorganization.

Shinhan Bank and Koram Bank, which can hardly survive independently, seem to find a way out of the difficulty positively such as a merger of two banks or amalgamation with the Korea First Bank.

Experts indicated that this amalgamation is just a sign of the large-sized bank.

Kim Seung-yu, the president of Hana Bank said on August 6, that the bank would move into the first or second place through additional amalgamation. Kim Jeong-tae, the president of Kookmin Bank said that this merger of two banks just meets the basic conditions for the survival.

It means that the banks will seek the large-sized organization through merging continuously.

Started as an investment banking in 1071, Hana bank changed its organization into the bank in 1991 and then has developed with rapid progress for 10 years.

▽ Reorganization of Domestic Banking Industry 〓 As of the end of March, the assets of Hana Bank and Seoul Bank are KRW 82 trilion, the third place after Kookmin Bank (KRW 194 trillion) and Woori Bank (86 trillion). It is forecasted that the Hana Bank will be ahead of Woori Bank owing to the recent growth.

Besides, the Shinhan Bank (KRW 66 trillion) and Koram Bank (36 trillion), which were evaluated as a top-ranking bank, will be shaky and unstable. Koram Bank falls into the second small bank, after the Korea First Bank (KRW 27 trillion). This bank has the smaller branches of 227 than the Korea First Bank (392 branches).

Experts said “Banks must seek the large-sized organization because there is no niche market in Korea.”

Because of it, experts are skeptical about the possibility of the independent survival of Hana Bank, Shinhan Bank and Koram Bank except Kookmin Bank out of top-ranking banks.

Han Jeong-tae, the analyst of Mirae Asset said “Korean banking industry firstly must survive by extending the size because it is in a transition period. The Hana Bank established a footing of take-off firstly”

▽ Imminent Shinhan Bank and Koram Bank 〓 There will be the visible results from a discussion on the amalgamation of Shinhan Bank and Koram Bank.

One official of the commercial bank said, “JP Morgan and Carlyle, the large shareholders of Koram Bank had the different opinion on this amalgamation. However, this merger will be progressed because the bank can hardly survive independently.”

Sung Byeong-su, the analyst of Kyobo Securities said “As the stock price of Koram Bank is higher than a book value, it showed the opinion difference with Shinhan Bank. However, there is an affirmative opinion on the amalgamation owing to the decrease of the recent stock price.”

However, if Carlyle that acquired stocks for KRW 6,800 per share desires a higher earning rate, the amalgamation can be delayed.

Experts forecasted that the Korea Exchange Bank and Chohung Bank would progress as a financial holding company. The analyst of the securities company forecasted, “the Korea Exchange Bank and Chohung Bank have been concerned about the incapable acquisition of other banks and non-attraction as the bank for acquisition.. Accordingly, they will seek the independent survival through the financial holding company”



Na-Yeon Lee larosa@donga.com