[EDITORIALS]A Merger We Cannot Let FailKim Jung-tae, president of H&CB, has been named to head the bank to be formed by the merger of H&CB and Kookmin Bank. Despite the drawn out process, stock prices of the two banks went up Friday, indicating a favorable market response to the selection. This reaction suggests booming expectations for the new bank, which will rank 60th in the world with assets of 180 trillion won ($139 billion).
Yet, its newly named chief faces many tasks. Above all, he must guide the employees and executives of the two banks in a united effort and maximize the synergy of the merger. The two missions are contradictory. Each bank developed its business through retail banking focused on individual customers. To promote synergy, the closing of overlapping branch offices and dismissal of redundant employees is unavoidable. With layoffs looming, a heartfelt bonding between employees is difficult to expect.
We can understand the view of Kookmin Bank's labor union, which is protesting the appointment of Mr. Kim. But the chagrin is felt not only by the labor union, which is disappointed over losing the top post to a smaller bank. Yet, it should exercise restraint and not ignore customers, as it did at the end of last year. It should resolve the problems through continuous talks and negotiations.
The new bank head carries an even larger responsibility. He should exercise leadership, embracing Kookmin Bank employees at the same time. He should keep in mind the advice of Kim Pyung-joo, leader of the panel that selected the head of the new bank, who said the marriage cannot be made to work through layoffs alone.
The government should also restrain itself from interfering.
Foreign investors are major shareholders of the two banks, and the government should guarantee the full independence of the merger. If this merger fails our financial system would be dealt a fatal blow.
Until the launch date of the new entity, scheduled in November, the employees of the two banks should come up with an answer to the fundamental question: Why did the two banks plan the merger?