June 18, 2010 11:23
Consolidation in the banking sector is expected to pick up steam with KB Financial Group's board having nominated Euh Yoon-dae as its new chairman on Thursday.
Before being tapped to lead the parent company of Kookmin Bank, the country's largest lender, Euh said the Korean banking industry needs a "mega bank" with bigger global influence. Analysts predict his nomination will speed up the group's push to become bigger by merging with other banks.
KB Financial Group is widely expected to emerge as a key consolidator, taking over Woori Financial Group, Korea Development Bank or Korea Exchange Bank. At the moment, the most likely targets are Woori and KDB as Euh is said to have little interest in acquiring KEB.
Woori has a strong presence in the non-banking side of the business which KB hopes to venture into. The government, which owns a 57-percent stake in Woori, will announce sales plans for the lender in the coming weeks, while state-run KDB Financial is planning an initial share sale next year.
U.S. private equity fund Lone Star is also selling its controlling stake in KEB.
A merger of KB Financial Group and Woori would create the biggest financial group by far in Korea and a global top 50 financial firm.
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