SEOUL, July 13 (Korea Bizwire) — Major banking group Hana Financial Group said Monday that it plans to complete a merger between its two banking units — Hana Bank and Korea Exchange Bank (KEB) — before October as KEB’s labor union has agreed on the proposed merger.
Hana Financial has been pushing for the merger since its acquisition of KEB from U.S. buyout fund Loan Star in 2012 but faced strong opposition from the KEB union, which claims Hana had promised to allow an independent management for five years.
In February, a Seoul court issued an injunction banning Hana Financial from engaging in any merger processes, citing its earlier promise with KEB’s union.
But an appellate court ruled in favor of Hana Financial last month, dismissing the earlier court’s injunction, to pave the way for the company to resume the talks with the labor union.
“(We) reached an agreement on the principle of the integration, name of the united bank, the procedure and synergy sharing of the integration, and guarantee of job security,” Hana Financial said in a filing.
“We also decided to implement the agreement with sincerity based on the principle of good faith.”
A Hana Financial official said the united entity will be launched before October.
Hana Financial is expected to file a request with the Financial Services Commission (FSC), the country’s financial regulator, for the merger approval later this week. The FSC has stressed that mutual consent between Hana Financial and KEB union is a prerequisite for approval.
“We will speed up the process for approval of the Hana Bank-KEB merger,” said an FSC official. “The FSC will support the company to complete the integration.”
The integrated Hana-KEB bank is expected to emerge as the largest lender by assets in South Korea. Their combined assets stood at 338 trillion won (US$298.6 billion) as of end-March, outpacing Kookmin Bank with assets of 313 trillion won.
Shares of Hana Financial traded at 29,500 won on the Seoul bourse as of 10:25 a.m., up 2.25 percent from the previous close, with the benchmark KOSPI gaining 0.32 percent.