Hana Financial Group chairman Kim Jung-tae has reiterated his support for speeding up the merger between Hana and Korea Exchange Bank, stressing that the synergy from the integration would be worth up to 1 trillion won ($980 million).
“The KEB, Hana merger is a bonanza,” Kim said during an executive workshop over the weekend. “The early merger will serve as a critical opportunity to make a breakthrough in the internal and external crises and prepare for future growth.”
|Hana Financial Group chairman Kim Jung-tae|
Kim’s emphasis on merging the two firms ahead of the scheduled date of 2017 indicates that the integration may be imminent, according to industry insiders.
On July 3, Kim had already told reporters that “it may be time to start discussing the integration (of Hana Bank and KEB).” Further, 135 executives from Hana and KEB have signed an agreement to push for merger ahead of schedule.
“Our agreement came from a sense of crisis that an early merger is the only key to both firm’s growth in the difficult financial environment,” Hana Financial said in its statement on Sunday.
The merger is expected to help the two financial units cut costs and pursue profit amid a downturn in the local banking sector. According to Hana, the two firms would post an annual profit of up to 269.2 billion won, while cutting 42.9 billion won of costs following the merger ― leading to a calculation that the merged entity would generate more than 1 trillion won a year in profit, Hana officials said.
The KEB union, however, appeared unconvinced.
When Hana Financial acquired KEB from Lone Star Fund in 2012, it had to postpone the integration process between the banking units on account of the fierce backlash from the KEB union.
The KEB union recently spoke out against Hana on the latest developments, condemning the firm for breaking the promise it had made in 2012 guaranteeing KEB’s managerial independence for five years.
“Before Hana acquired KEB, our per capita productivity was at the top of the industry,” the KEB union said in a statement. “Hana should blame its poor management before discussing the merger.”
By Suk Gee-hyun (email@example.com