Kookmin to expand in Asia after acquisition
(4 April 2006 – South Korea) South Korea’s Kookmin Bank has purchased a 64.6 percent stake in larger rival Korea Exchange Bank (KEB) for US$6.6 billion.
Kookmin is South Korea’s sixth largest bank by assets and KEB is the fifth largest local bank. The combined bank will have roughly 35 percent market share and some US$260 billion in assets.
Kookmin’s chief executive Kang Chung-won said an expanded bank would allow it to target emerging markets in "Asia which enjoy large funding needs and high margins" using KEB’s distribution network.
But he warned that "big size' no longer guaranteed returns under the rapidly changing financial market environment and that it was time to develop a "new business model".
Kookmin posted record profits in 2005 following several years sorting out bad debt problems. In early 2004 it shed 17 percent of its workforce.
Kookmin’s chief executive Kang Chung-won said an expanded bank would allow it to target emerging markets in "Asia which enjoy large funding needs and high margins" using KEB’s distribution network.
But he warned that "big size' no longer guaranteed returns under the rapidly changing financial market environment and that it was time to develop a "new business model".
Kookmin posted record profits in 2005 following several years sorting out bad debt problems. In early 2004 it shed 17 percent of its workforce.
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