Industrial Bank Soothes Union Merger Outrage

Denying speculation that a union with Korea Exchange Bank is in the works, the head of the state-owned Industrial Bank of Korea said that he would not pursue a merger with an ailing bank.

Lee Kyung-jae said Friday that "a merger with a troubled bank could hurt our role of providing financing to small and midsize firms to help strengthen the economy." The bank president added that he would not push the bank to establish a financial holding company either. "A more cautious approach is necessary, and we will consider opinions coming from all sides," he said.

The announcement came after a late-night meeting Thursday between Mr. Lee and the chief of the bank's labor union, Si Suk-jung. "We discussed the recent merger talks with Korea Exchange," said the union rep. "The president's opinions were not much different from ours, as he promised that no merger with an unhealthy bank would take place." Mr. Si insisted, however, that the union will continue protesting until the merger talks are put completely to rest.

by Lee Hyo-joon