Private Equity Korea » KB Financial

Hana Financial named preferred bidder for suspended savings banks

Stephanie Lim — Fri, 23 Dec 2011 00:19:47 +0000

Yonhap News Agency has reported that the Korea Deposit Insurance Corp. has selected Hana Financial Group Inc. as the prime bidder for the package sale of two local savings banks, Jeil 2 Savings Bank and Ace Mutual Savings Bank, which were suspended due to capital shortage.

Jeil 2 and Ace Mutual are two of seven troubled savings banks that the Financial Services Commission suspended in September after a pile-up of soured property loans deteriorated the banks’ financial health. A total of 16 savings banks have been suspended this year.

If Hana Financial successfully acquires these two banks, it will join the list of other major banking groups that have moved to acquire suspended savings banks. Top player Woori Financial Holdings Co. took over Woori FG Savings Bank earlier this year, while KB Financial Group Inc. and Shinhan Financial Group Co. were selected as preferred bidders for Jeil Savings Bank and Tomato Savings Bank, respectively.

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Kookmin Bank sells KB stake to meet regulations

Stephanie Lim — Fri, 08 Jul 2011 11:22:39 +0000

According to Reuters, on July 8, South Korea’s top mortgage lender Kookmin Bank sold a 9 percent stake worth $1.7 billion at 51,800 won apiece in its parent KB Financial Group, raising KB shares by nearly 4 percent.

This sale is a result of the previously mentioned revised local banking laws that do not allow banking institutions to hold shares in financial holding companies, which come into effect this September.

The stock, which had been weighed by concerns that KB may bid for a stake in Woori Finance Holdings , rebounded by around 8 percent after it did not participate in the bidding that closed on June 29.

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KDIC receives bids for savings banks packages

Stephanie Lim — Mon, 27 Jun 2011 07:01:39 +0000

The JoongAng Daily has reported that on June 24, the Korea Deposit Insurance Corp. (KDIC) received five bids for the acquisition of the savings bank package containing Jungang Busan Savings Bank, Busan II Savings Bank, and Domin Savings Bank.

Three of the bids were made by major players KB Financial Group, Shinhan Financial Group, and Hana Financial Group, while the other two were made by smaller firms Kiwoon Securities and Daishin Securities.

Out of the three packages of suspended savings banks for sale, the package including Jungang Busan is the only one that has drawn interest, as their balance sheets are more comparatively sound.

The KDIC is to select a preferred bidder on June 27.

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FSC ousts KDB from Woori sale

Stephanie Lim — Wed, 15 Jun 2011 02:14:17 +0000

Several local news media outlets have published headlines stating that the FSC has publically announced that KDB will not be allowed to bid for the 56.97 percent share of Woori Finance Holdings.

JoongAng Daily reported that, at a National Assembly committee hearing on June 14, FSC Chairman Kim Seok-dong said the government barred KDB from making a bid due to “the current lack of public consensus” about KDB’s participation.

This new development in the ongoing Woori saga will increase the likelihood that the FSC will get approval for their legislative amendment for easing bank ownership. Now that a KDB-Woori merger is out of the picture, the regulators are free from the fierce public opposition that surrounded the sale.

The FSC chairman also emphasized that the privatization of Woori Finance is not only about recovering public funds, but also about the creation of a large banking institution that would help develop the domestic industry. He added that the Woori sale is still open to all local and foreign bidders other than KDB.

Unfortunately, no other bidder has shown interest in the sale. KB Financial Group was once considering the purchase, but has withdrawn from the running, explaining that a merger between the two companies would be undesirable.

The KDIC will be accepting LOIs until June 29.

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Regulators act to ease restrictions for Woori Finance sale

Stephanie Lim — Mon, 30 May 2011 09:27:20 +0000

According to Yonhap News, financial regulators announced on May 30 that they are trying to get regulatory revision to allow financial holding companies to buy a controlling stake in state-owned Woori Finance Holdings Co. This is the government’s second attempt to privatize the country’s second-largest financial group. Their first attempt in November 2010 failed due to a lack of investor interest caused by high costs and tough requirements.

Current regulations require local bank holding firms to purchase the entire stake in a bank holding firm with a government stake to consolidate the target company. According to the Financial Services Commission (FSC), a revision would only allow bank holding firms to buy a 50 percent stake. The regulator plans to submit the revision at the FSC’s regular decision-making meeting this June in order for it to come into effect by July or August.

The revision is expected to pave the way for the country’s big financial holding firms, like government-owned KDB Financial Group Inc. or KB Financial Group Inc. to make bids.

So far, state-owned KDB Financial, headed by former finance minister Kang Man-Soo, has expressed interest in acquiring the stake. However, KDB Finance is also one of the administration’s targets for privatization. According to a revised governance law of KDB Financial, the company is required to offer its shares to the public and sell at least one share to a private shareholder by May 2014.

The FSC’s plan to revise this regulation has sparked criticism that it would pave the way for the state-controlled financial group to use public finances to buy another state-run financial firm. This would contradict one of the FSC’s goals in this privatization, which is to recover taxpayer money that was spent to salvage Woori Finance.

The Korea Deposit Insurance Corp., the deposit insurance agency holding the 56.97 percent stake in Woori Finance, is accepting letters of intent to until June 29 and plans to select a bidder by this September.

Holding firms intend to acquire suspended savings banks

Stephanie Lim — Fri, 27 May 2011 06:00:44 +0000

Local news media JoongAng Daily reported that several financial holding companies are officially pursuing the seven suspended savings banks. KB Financial Group and Shinhan Financial Group have publicly announced M&A intentions.

Euh Yoon-Dae, chairman of KB Financial, said on May 25 that KB is looking at the banks, but has not yet made a decision on which one to purchase.

Han Dong-woo, chairman of Shinhan Financial, told reporters that the company is “undergoing a procedure to choose which savings bank package deal is the least insolvent.”

The FSC has grouped the savings banks into three packages. One consists of Jungang Busan Savings Bank, Busan 2 Savings Bank and Domin Bank. Another includes Jeonju Savings Bank and Busan Savings Bank. The third is comprised of Daejeon Mutual Savings Bank and Bohae Bank.

UPDATE: Seven firms submit LOI to buy suspended banks

Yonhap News has reported that seven financial firms, including top banking group KB Financial, have submitted their letters of intent to buy a package of two or three suspended savings banks.

The country’s three major banking groups, KB Financial, Shinhan Financial, and Hana Financial, gave their letters of intent to KDIC on May 30.

Four other non-banking players, including mid-size brokerage firm Kiwoom Securities, also applied to join the auction.

Yonhap added that if the KDIC fails to sell the seven banks in packages, the agency will attempt to sell them separately.

M&A between Woori and KB grows imminent

Stephanie Lim — Thu, 21 Apr 2011 04:52:08 +0000

The Korean government plans to publish a schedule for the privatization of Woori Finance next month. Since Hana Group acquired KEB, an M&A between Woori and KB Finance seems to be practical solution.

Experts say that KB Finance has long prepared for the Woori deal and they will likely be able to afford the deal, since it was managed conservatively and expects profits of more than 2 trillion won this year. Their hope is that the deal will synergize consumer and corporate banking.

The Korean government lists three principles for its privatization efforts: maximal recovery of public money, development of the financial industry, and quick and efficient privatization.

Source: translated from Money Today

M&A between Woori and KB grows imminent

Stephanie Lim — Thu, 21 Apr 2011 04:52:08 +0000

The Korean government plans to publish a schedule for the privatization of Woori Finance next month. Since Hana Group acquired KEB, an M&A between Woori and KB Finance seems to be practical solution.

The Korean government lists three principles for its privatization efforts: maximal recovery of public money, development of the financial industry, and quick and efficient privatization.

Source: translated from Money Today

KB Financial to buy savings banks

Stephanie Lim — Fri, 01 Apr 2011 06:06:59 +0000

Local media MK Business News has reported that representatives of KB Financial Group have announced their intent to bolster their savings bank operations.

This is yet another indication that the competition for the lower-credit market will be increasing in the near future.

The suspension of Samhwa Mutual, which was later acquired by Woori, triggered a bank run among lenders. Financial regulators have imposed business bans on seven more savings banks since February.

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Woori looks to buy more savings banks, wants to move towards Micro-lending

Stephanie Lim — Tue, 29 Mar 2011 02:01:40 +0000

Local news media JoongAng reports that Daily Woori Financial Group stated on March 28 that it plans to acquire one to two more savings banks in order to diversify its business into microcredit finance.

Woori FG Savings Bank, formerly Samhwa Mutual Savings Bank, was bought by Woori Financial, the nation’s second biggest banking group by assets. Woori purchased Samhwa Mutual after the latter was suspended for six months by the Financial Services Commission in January due to inadequate capital.

Chairman Lee of Woori Financial group announced that “Woori Financial is currently focused on large corporate, small and mid-sized companies and households, but by acquiring savings banks, we will be able to cover all types of customers by providing microcredit finance services.”

Large conglomerates and SMEs account for 60 to 70 percent of Woori Financial’s business while the rest consists of retail.

On March 25, when Woori FG Savings Bank first started operation under its new owner, 30 percent of the 14,000 customers whose deposit accounts at former Samhwa Mutual Savings Bank had reached maturity between January and March decided to extend their accounts. Woori FG Savings Bank is Woori Financial’s 11th subsidiary.

The FSC has suspended eight savings banks and plans to put them up for sale after determining their viability. Woori’s rival banking groups – KB Financial Group Inc., Shinhan Financial Group Co. and Hana Financial Group Inc. – have also shown interest in taking over troubled savings banks in order to rescue the ailing savings bank sector and obtain synergy effects from consolidations

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Private Equity Korea » KB Financial

Hana Financial named preferred bidder for suspended savings banks

Kookmin Bank sells KB stake to meet regulations

KDIC receives bids for savings banks packages

FSC ousts KDB from Woori sale

Regulators act to ease restrictions for Woori Finance sale

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