Hana, KEB hit brakes on merger

Hana Bank and Korea Exchange Bank, which were planning an early merger despite objections from KEB’s labor union, have taken a step back.

The two banks announced yesterday that they have decided to delay board meetings to discuss the early merger until they convince the labor union.

Last week, Hana Bank President Kim Jong-jun and KEB President Kim Han-jo held a ceremony in which they agreed to speed up the merger of the two institutions. It was 50 days after the issue was first brought up by Hana Financial Group Chairman Kim Jung-tai early last month.

The banks said they couldn’t wait for the consensus of the union because delay of the merger would only lead to more insecurity and confusion within the organization.

The banks have been arguing that to secure future growth and to overcome difficulties faced by the entire financial industry, a merger within this year was necessary instead of waiting until 2017, which Hana Financial Group promised when it bought a majority of KEB’s shares in 2012.

Yesterday the banks said through a statement that during a two-day Hana Financial Group executives’ workshop, which included outside directors, it was agreed it was important to get the consensus of the KEB unionized workers as well as to expand the opportunity for employees of both banks to communicate with one another.

“The executives decided to postpone the board meetings of both banks after it came to the conclusion that additional negotiation is necessary since official agreement of the union hasn’t been going smoothly,” said a KEB official.

The banks once again stressed that although they have requested cooperation from the KEB labor union since July 7, the union refuses to sit down and iron out the issue.

Both banks said they started a two-day “vision camp” for employees to have more opportunities to hold open discussions with management. There will be 12 such camps held through Oct. 7.

“By sharing the group’s vision and stepping up our approach via a sentimental connection and communication, we hope to expand the idea of the need for the merger among employees,” the KEB official added.

Meanwhile, nearly 5,200 non-management employees of KEB submitted a petition to the Constitutional Court yesterday asking for a blocking of the merger.

BY lee ho-jeong [ojlee82@joongang.co.kr]