Shinhan Bank Speeds Up Plan to Look for a Merger

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Shinhan Bank Speeds Up Plan to Look for a Merger

Shinhan Bank, the nation's strongest commercial bank, may be looking to merge with another healthy bank after it sets up a holding company in June.

"We initially planned to begin aiming for a merger in 2003," a bank official said Monday. "But with market rates falling recently and bank depositors withdrawing their money, we've decided to move up the timetable."

Shinhan plans to set up two subsidiaries for the holding company by the end of March. One will be a financial portal whose site will link financial products and services offered by the bank's other subsidiaries. The other will be a corporate financing advisory company partnered with Macquarie Bank of Australia. It will provide consultation to domestic companies on project financing and mergers and acquisitions.

Five other units will be put under the holding firm: Shinhan Bank, Shinhan Securities, Shinhan Life, Shinhan Investment Management Trust Co. and Shinhan Capital. Each company will hold shareholders meetings in May to get their owners' green lights. Cheju Bank will also be folded into the firm.

Spurred by Shinhan, other banks are getting merger fever. "We have decided to actively pursue the creation of a large-scale financial group either through a merger with other banks or by setting up our own financial holding company," a Korea Exchange Bank official said. "This will enhance our competitiveness and maximize our shareholders' interests." He also said that the bank would sell its card unit, to help the bank improve the soundness of its assets account, before pursuing a merger or holding company plan.

The government-invested Industrial Bank of Korea is also reported to be reviewing plans to pursue consolidation with other commercial banks. "But there are many opposing voices," an official at the bank said.


by Oh Jung-hee

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