Korea Exchange Bank shareholders approve new CEO

(ATTN: ADDS more details about stock options from para 4)
SEOUL, March 31 (Yonhap) -- Korea Exchange Bank (KEB), controlled by U.S. buyout
fund Lone Star Funds, said Tuesday its shareholders approved the appointment of a
new chief executive officer at an annual meeting.
Larry A. Klane, 49, replaces Richard Wacker and will lead South Korea's
fifth-largest lender for the next three years, KEB said. Klane is a former
president of the global financial services unit of Capital One Financial Corp.
The change of the KEB head comes about six months after British banking giant
HSBC Holdings Plc pulled out of a deal to buy a 51.02 percent stake in the
lender, citing falling asset values amid global financial market turmoil.
Meanwhile, KEB shareholders decided to grant Klane the right to buy 900,000
shares at an exercise price of 6,300 won (US$4.52). But if the lender faces a
situation in which it has to take public funds or tap a bank recapitalization
fund, its executives will abandon stock options granted for this year, KEB added.
Local banks are set to receive a capital infusion by tapping a 20 trillion won
recapitalization fund in a bid to cushion the impact of the severe economic
downturn and expand lending to the real economy.
KEB, which has recently sold hybrid debts worth 250 billion won to raise its
capital base, can draw up to 250 billion won out of the fund.
"We certainly hope to avoid that," Wacker told reporters after the meeting, when
asked about a possibility of using the fund.
KEB's move to grant stock options drew criticism amid a recent decision by
executives at local banks to give up such rights as part of an effort to share
the burden of the sharply slowing economy. KB Financial Group and Shinhan
Financial Group recently took such steps.
The lender's shareholders also decided to pay out dividend worth of 125 won per
share, enabling Lone Star to receive a pre-tax dividend worth 41.1 billion won.
sooyeon@yna.co.kr
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