Hana, KEB may merge offshore unitsHana Financial Group and Korea Exchange Bank are pushing to merge their offshore subsidiaries, but nothing has been decided yet, the KEB chief said yesterday, seeking to assuage strong opposition to the plan from the KEB union.
Hana Financial took over KEB from U.S. buyout firm Lone Star Funds in February 2012 through acquiring a 51.02 percent stake worth 4.69 trillion won ($4.34 billion), before it raised its holdings to 60 percent later in the year.
“We’ve never concluded that we’ll merge the subsidiaries (in Indonesia and China). There was just some misunderstanding when we announced the plan in public and we’re contemplating ways to do so,” Yun Yong-ro, the president and chief executive of KEB told reporters.
His comment came after Hana Financial, No. 3 lender and new controlling firm of KEB, said in a regulatory filing on Feb. 14 that it plans to integrate the overseas-based subsidiaries currently run separately by the two banks.
Hana Financial said the Indonesian operations will be merged by late December this year, with those in China to follow suit by the year-end, citing both countries do not allow a foreign bank to run subsidiaries as separate entities.
The merging plan, however, spawned strong opposition from the labor union at KEB, who accused Hana Financial of forcing the integration and violating the agreement which stipulates that any merger talks should be sealed for the first five years of the takeover.
The labor union at KEB claimed Hana Financial is ignoring other options available, including setting up a holdings company abroad.
Yun spurned heightening tension between the two lenders, saying “it will take time (for KEB) to completely scrape off its own color but KEB now is definitely different from what it was like a year ago.”
In late January, Hana Financial said it will buy an additional 40 percent stake in KEB in April by swapping shares, to complete the takeover of the No. 5 lender.
More in Finance
Kospi breaks another record as buying spree continues
Samsung Life warned by the FSS about claim denials
Dollar's weakness pushes won to 30-month high
Kospi hits another high on chipmaker optimism
Eight companies agree to share credit card data