SC First dropping ‘First’ from name by year’s end

SC First will be dropping the “First” from its name within this year.

With the decision, the memory of Korea First Bank, which Standard Chartered bought in 2005, will be ended after more than half a century.

SC First Bank said yesterday its board members met on Thursday and agreed to drop “First” from its bank’s name.

“Since last year we have been considering whether to remove ‘First’ from our corporate name,” said an official at SC First.

“The board of directors hasn’t decided on the new name or when that change will take place,” she said, “but there is a possibility that the new bank’s name will be Standard Chartered Korea, and it will definitely be changed by the end of this year.”

The official said the board of directors has decided to change the name since Standard Chartered has become a globally recognized brand.

“We hope to create synergy using Standard Chartered’s international bank brand platform and offer an international standard of service and products that is distinct from other brands,” the official said.

However, the bank said it will continue to use “First” in new financial products and in Standard Chartered’s buildings due to its historical value.

Korea First Bank started as a small savings bank in July 1929. It changed its name and expanded into Korea First Bank in 1958.

Korea First Bank suffered severely from the financial crisis of the late 1990s and was brought to near bankruptcy.

After a fierce competition between Standard Chartered and HSBC, the London-based company bought the Korean bank from its largest shareholder, Newbridge Capital, for 3.4 trillion won ($2.9 billion) in 2005.

Standard Chartered adopted the name SC First Bank to pay tribute to its history.

At the time of its acquisition, Korea First Bank was the nation’s seventh-largest banking company with assets of 46 trillion won. Prior to the financial crisis Korea First Bank was one of the top five banks in the nation.

In the six years since, SC First’s position in the local banking industry hasn’t improved. It has 5 percent of the local banking market share and ranks sixth by assets, trailing behind major players like Woori, KB, Shinhan, Hana and Korea Exchange Bank.

SC First is not the only foreign-invested company in Korea that is changing its name.

In March, GM Korea removed the Daewoo from its name in hopes of expanding market share with an improved brand image. The move seems to have worked.

Sales between March and September shot up 20.6 percent from a year ago and, as a result, GM’s Korean unit, which ranked fourth among the five Korean automotive companies in the country, now ranks third.

Its own surveys say customers who want to buy a GM Korea vehicle for their next car has jumped 45 percent, up 7 percentage points from when the company still went by the name GM Daewoo.

“Changing the brand from GM Daewoo to a global Chevrolet brand improved our corporate image as well as the public’s confidence in our products,” said a public relations representative at GM Korea.

Standard Charter’s decision comes at a time when SC First’s public image has been tarnished from an ongoing labor conflict. The company’s union in on the longest strike in the Korean financial industry’s history to protest the management’s performance-based compensation system.

Additionally the bank has been suffering from union accusations of profiteering because the bank made a hefty dividend payout of 199.6 billion won last year, which is 62 percent of the 322 billion won net profit for the year. There was even speculation that the bank may be pulling out of the Korean market after SC First closed 27 branches in the first half of this year.

Some market analysts said that SC First is changing its name to repair its dented image.

SC First executives are planning to discuss the name change with the labor union.

Many union members who worked for Korea First Bank are unhappy with the idea.

“The chief executive promised the union to keep the name until the end of this year,” said a labor union official. “Taking ‘First’ from the bank’s name is the same as erasing the bank’s tradition.”

By Lee Ho-jeong [ojlee82@joongang.co.kr]