KB Financial Group will not participate in the looming auction of the government-held stake in Woori Finance Holdings Co., its CEO said Monday, the Korea Herald reported.
“KB, currently making losses, has no capacity for acquiring another company. We will consider (mergers and acquisitions) only after we get healthier,” Euh Yoon-dae, KB Financial’s chairman and CEO, told a press conference.
Euh, who took office on July 13 as the chief of the nation’s largest financial group, has vowed to tackle the group’s low profitability and management inefficiency, describing it as “a patient suffering from obesity.”
Although the group has set aside nearly 1.5 trillion won ($1.2 billion) in provisions against loan losses, it is not a clean bank yet, Euh said, adding that tackling low labor productivity and inefficiency is the No. 1 priority for KB Financial.
The chairman, although he ruled out an M&A deal in the near future for KB Financial, reiterated his “personal belief” that the country needs to foster home-grown mega-banks in order to advance the local financial sector.
He went on to refute opponents of the mega-bank theory who claimed that Korean banks are big enough already, when considering their share in the domestic economy.
The Samsung Economic Research Institute made such a claim in a recent study, saying that the assets of Kookmin Bank amount to 24.1 percent of the nation’s gross domestic product, compared to the Bank of America’s 15.6 percent contribution to the U.S. economy.
“Why compare to the United States alone?” Euh said. There are countries like Switzerland, the United Kingdom, France, Sweden and the Netherlands where major banks’ assets account for more than 100 percent of their respective country’s GDP, he said.
Source: Korea Herald
No related posts.
