H&CB's Card Unit to Survive Merger

Kim Jung-tae, chairman of the bank to be formed by the merger of H&CB and Kookmin Bank, said recently that the new entity would keep H&CB's credit card business. He also said that H&CB would cut its interest rates for time deposits and ask Kookmin to do likewise.

"We'll need more discussion regarding the card business," Mr. Kim said, "but any change made will be done so H&CB's card unit does not lose its existing customers."

Any plans to merge the two banks' payment card operations could compel H&CB's credit card customers to break away from H&CB, Mr. Kim said. "We also take it into consideration that H&CB is a member of BC Card association, unlike Kookmin's independent card business," he said.

Some analysts have said that if the two banks merge their card units, all efforts that H&CB made to promote its card would have been in vain.

An H&CB official confirmed that H&CB will lower its rates time deposits, with the highest rate falling 0.3 percentage point to 5.6 percent, and ask for Kookmin to do the same. "There are few good places to invest," the official said, "so even with the rate cut, not many customers will withdraw their deposits."

by Cheong Chul-gun