ID :
73960
Thu, 08/06/2009 - 11:27
Auther :
Shortlink :
https://www.oananews.org//node/73960
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KEB head says time not right for sale of lender
SEOUL, Aug. 5 (Yonhap) -- The head of the Korea Exchange Bank (KEB) said Wednesday that given current economic uncertainty, now is not the appropriate time to push for the sale of the lender controlled by Lone Star Funds.
The sale of South Korea's fifth-largest lender has been stalled since British
bank HSBC Holdings Plc pulled out of a deal to buy a 51.02 percent stake in the
bank in September last year amid the global financial turmoil.
"Despite the rise in KEB's stock prices and some warming in the general markets,
I think it is still a very difficult time for large scale banking transactions,"
president Larry A. Klane told a press conference.
Klane took office on April 1, replacing Richard Wacker as head of the lender for
the next three years.
As the stock market revives and signs of economic improvement rise, the state-run
Korea Development Bank and KB Financial Group have shown interest in buying KEB,
raising the prospect of potential takeover moves in the local banking sector.
In September 2007, HSBC agreed to buy KEB for US$6.3 billion, but the deal
remained deadlocked as the financial watchdog withheld its approval, citing legal
disputes over Lone Star's 2003 purchase of KEB. A global financial crisis also
prompted HSBC to terminate an offer to purchase KEB amid differences in price
renegotiations following a plunge in KEB's share prices.
"Our major shareholder...at some point will (unload) its shares...Despite the
rumors, this is not that time," Klane said, adding that it is up to Lone Star to
decide on the sale, not KEB.
Shares of KEB tumbled to less than 6,000 won ($4.92) late last year, but it
recovered earlier losses and is trading at 11,750 won as of 2:18 p.m., up 0.43
percent on the main bourse.
The conference came after the lender said earlier in the day that KEB swung to
the black in the second quarter from three months earlier thanks to lower
loan-loss provisioning and one-off gains from stake sale. Its net profit amounted
to 238.2 billion won in the April-June period, a turnaround from a loss of 74.8
billion won the previous quarter.
The sale of South Korea's fifth-largest lender has been stalled since British
bank HSBC Holdings Plc pulled out of a deal to buy a 51.02 percent stake in the
bank in September last year amid the global financial turmoil.
"Despite the rise in KEB's stock prices and some warming in the general markets,
I think it is still a very difficult time for large scale banking transactions,"
president Larry A. Klane told a press conference.
Klane took office on April 1, replacing Richard Wacker as head of the lender for
the next three years.
As the stock market revives and signs of economic improvement rise, the state-run
Korea Development Bank and KB Financial Group have shown interest in buying KEB,
raising the prospect of potential takeover moves in the local banking sector.
In September 2007, HSBC agreed to buy KEB for US$6.3 billion, but the deal
remained deadlocked as the financial watchdog withheld its approval, citing legal
disputes over Lone Star's 2003 purchase of KEB. A global financial crisis also
prompted HSBC to terminate an offer to purchase KEB amid differences in price
renegotiations following a plunge in KEB's share prices.
"Our major shareholder...at some point will (unload) its shares...Despite the
rumors, this is not that time," Klane said, adding that it is up to Lone Star to
decide on the sale, not KEB.
Shares of KEB tumbled to less than 6,000 won ($4.92) late last year, but it
recovered earlier losses and is trading at 11,750 won as of 2:18 p.m., up 0.43
percent on the main bourse.
The conference came after the lender said earlier in the day that KEB swung to
the black in the second quarter from three months earlier thanks to lower
loan-loss provisioning and one-off gains from stake sale. Its net profit amounted
to 238.2 billion won in the April-June period, a turnaround from a loss of 74.8
billion won the previous quarter.
