|Ye Olde Korea Exchange Bank (KEB Hana Bank Main Branch, 1st Business Division)|
South Korea's top financial regulator on August 19th 2015 gave its final nod to a merger between Hana Financial Group Inc.'s flagship bank units -- Hana Bank and the Korea Exchange Bank (KEB), paving the way for the creation of the country's largest lender by assets. The integrated bank, named KEB Hana Bank, is scheduled to be launched in September upon the approval of the Financial Services Commission (FSC).
The Hana Bank-KEB merger has been a long-cherished desire of Hana Financial, the third-biggest banking group, since it acquired the KEB from U.S. buyout fund Lone Star in 2012. It had promised to run KEB as an independent entity for five years, but pushed for the merger, citing a fast-changing trend in the industry.
Despite strong protests against the move from KEB's labor union, the banking group filed a petition with the FSC for the preliminary approval in January, but soon withdrew it as a Seoul court upheld the KEB union's demand to stop the merger process. The FSC had stressed that labor-management agreement for the merger is a prerequisite for the integration.
An appellate court ruled in favor of Hana Financial in June, however, to pave the way for the company to resume the talks with the labor union. As Hana Financial gained consent from the union last month, the financial regulator became supportive of the merger and accelerated the review process to give the final approval in August 2015.
|KEB Hana Bank Main Branch, 2nd Business Division at Hana Bank Building|
Upon officially capping the KEB-Hana merger, the new entity rose to become the nation’s largest lender, with assets of 298.8 trillion won ($254.8 billion). Ham Young-joo, the first president and CEO of KEB Hana Bank, stressed on strong performance in sales. He said the banking scene was going through substantial changes, such as the advent of account switch services and individual savings account services.
“No top-class bank has weak earnings,” Ham said in the press conference held in the former KEB headquarters in central Seoul, following the launch ceremony.
In order to secure a larger pool of customers amid the current low-interest tide, the former KEB labor union leader vowed stronger sales based on combining the comparative advantages of KEB and Hana Bank.
Ham said the bank must maximize synergy out of the former Hana Bank’s excellence in asset management and the former KEB’s global and investment banking. This requires strong chemistry between the officials of former KEB and Hana Bank employees, he added. In addition, Ham vowed to launch training sessions to make all KEB Hana Bank officials professional asset managers.
Ham also said the bank would offer improved package deals that bundled the financial services of its affiliates, such as card issuance, securities, capital, insurance and savings bank. In upcoming October, Hana Financial Group will launch “Hana Members” that can be used to pay loan interest. The CEO also vowed to strengthen risk management, diversification of portfolios and contributions to the community.
Ham said, “A bike that does not advance is doomed to fall, and so is (a bank) that adheres to the old way ― This is why change and innovation cannot be more appreciated at this moment.”
The launch came 14 months after Hana Financial Group chairman and chief executive Kim Jung-tai announced the merger plan on July 3. After seven months of intense negotiations between the group and the KEB labor union, the KEB Hana Bank won the official merger approval from the Financial Services Commission on August 19th.