Hana and KorAm Banks to announce merger next week at the earliest

Hana Bank and KorAm Bank are expected to announce a merger within the next week at the earliest.

KorAm Bank President Shin Dong-Hyuk said Wednesday in a ceremony celebrating the attraction of foreign capital that as the bank has successfully completed a capital increase, it will devote itself to raising competitiveness through a merger with another bank. He said that the bank will be able to announce its merger with Hana Bank by the end of this month at the latest.

The Carlyle Group-J.P Morgan consortium, which became KorAm¡¯s new controlling shareholder, also said that it expects the merger to have a positive effect on the bank¡¯s future value although it has yet to audit the bad debts of its merging partner.

However, President Shin indicated that working-level work on the merger such as the organization of management and equity exchange rate would not be easy, saying that it will take five to six months before the merger actually takes place. In particular, on the issue of who will take control in the merger, he said that his bank will not be incorporated into Hana Bank because KorAm has grown to possess more paid-in capital than Hana with its recent capital increase.

On the possibility of merging with other institutions such as Housing & Commercial Bank and Kookmin Bank, he responded that KorAm will take time to consider other options after finishing the deal with Hana.

Meanwhile, the Carlyle Group-J.P Morgan consortium, which secured a 40.1-percent stake in KorAm through a capital investment of 444.7 billion won, decided to nominate five of 13 Hana executives, but replaced the incumbent management, including President Shin.

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