Kookmin-H&CB might merge

A financial holding company that will be led by Hanvit Bank and another holding company will be established next week, and a merger among blue chips banks such as Kookmin Bank and Housing & Commercial Bank (H&CB) will be announced.

Lee Keun-Young, chairman of the Financial Supervisory Commission (FSC), said that there will be an announcement about formation of the financial holding company early next week, including integration of regional banks into the projected holding company that will be led by Hanvit Bank. He also noted that mergers among healthy banks would be announced.

The merger among blue-chip banks would come in addition to the ongoing integration between KorAm Bank and Hana Bank. The coming announcement alludes to a merger between Kookmin Bank and H&CB.

FSC Chairman Lee concluded that the KorAm-Hana merger was agreed between the two bank presidents six months ago, adding that leading foreign shareholders were expected to approve the merger.

He contended that Korea should have two megabanks, which would rank among the world's top 100 largest banks, in order to maintain the national competitiveness.

"The banks will work toward that direction in order to build themselves into a competitive player, and they will be reborn eventually," Lee said.

When asked if the merger plan is tightly pressed for time, he answered that the framework of the merger scheme will be revealed by mid-November, strongly hinting that it is in the final stage.

"If banks fail to announce their merger plans by the designated time, we would let them continue alone," he said. "We will finalize the big picture of the second-phase financial restructuring by the end of the year."

Lee Hoon dreamland@donga.com