HSBC tipped for Korean bank swoop
STANDARD Chartered and HSBC have been tipped as top contenders for a controlling stake in Korea's KorAm Bank.
Private equity firms Carlyle Group and JP Morgan are expected by analysts to sell their 36.6% stake in KorAm, the country's sixth-largest bank by assets.
They picked up the stake for £231m three years ago amid the region's financial crisis. The lockup period on that deal ends next month. The stake could now be worth around £600m.
Bryan Song, banking analyst at Merrill Lynch in Seoul, said Standard Chartered was a strong candidate as it had been building up its business in Korea.
Song said HSBC, which already has a retail business in the country, could also emerge as a contender. There may be additional interest from Singapore's DBS Group and others, he said.
Song said KorAm was expensive, trading at a 40% premium to bigger lenders such as Kookmin, Hana and Shinhan Bank.
Standard Chartered, led by chief executive Mervyn Davies, already holds almost 10% of KorAm, having raised its stake from 4% earlier this year, paying £91m.
Emerging-market specialist Standard Chartered, which makes twothirds of its profits in Asia, launched a consumer finance business-in South Korea last month. It has said it wants up to 5% of the market within five years.
KorAm has total assets of £20.6bn, more than 220 branches, and 6.5m retail customers. Carlyle has said KorAm has a strong brand, attracting customers during the late 1990s financial crisis as rivals came under pressure.
