September 11 Digital Archive: XML Document
Kukmin and Nara Bank merger discussed
Body:It has been reported that Koreas largest bank, Kukmin, is interested in merging with Nara Bank in order to enter the American banking market.
Last month, a fact-finding team, led by Kukmins international and administrative directors, met with Hanmi, Nara and Joong Ang Bank officers in Los Angeles to discuss the possibility of mergers. Even though Kukmin is interested in all three banks, it is said to favor Nara Bank because of its strong operations on both coasts.
In discussions between the Kukmin team and Nara Banks President and CEO Benjamin Hong, Kukmins offer was reported at two-and-a-half to three times Naras present market value. Nara Bank is already working with a Kukmin subsidiaryKukmin Cardto issue credit cards. Hong is currently in Korea on this matter.
Following reports of discussions with Kukmin, Naras stock rose in one week by 25 percent, from $16 a share.
Naras U.S. CEO, Thomas Chung, said, Kukmin Bank wants to establish business in America and is looking at ways to purchase a local bank. Well look at any formal offer they make.
However, the other banks officers said that Kukmins entry would shake the American market. They are extremely sensitive to this issue, which they see as a major deal.
Huge Korean bankslike Kukminare able to push their way into the American market and purchase any local bank. Kukmin has the financial power to conquer the market by providing competitive service to the American customer, the officers nervously agreed.
A Saehan Bank employee said that up to now, many Korean banks have tried unsuccessfully to enter the American market. Large Korean banks hoping to enter the American market need to adopt the American system of management. If they adopt local management style, then their competitive power can really shake up the American market.
Hanmi Banks Senior Vice President, Wun Hwa Choi, said, The Korean banking market in Los Angeles has no strong retail base. Even though large Korean banks try to establish themselves locally, they cannot easily achieve competitive power. He is convinced that local banks will be more successful commercially than the new Korean ones.
Huh Hong Shik, vice president of Joong Ang Bank, said, Management strategy is the key to success for Korean banks entering the American market. He also pointed out that if the Korean banks adapt properly to the local market, they can pose a true threat to American banks.