Nov. 8, 2009 (The Korea Times) -- By Yoon Ja-young
Staff Reporter
Korea Development Bank (KDB) is more interested in acquiring banks abroad than Korea Exchange Bank (KEB), its CEO said.
"I don't think the businesses of KDB are overlapped that much with those of KEB, but basically, we are more interested in banks abroad than KEB is," KDB CEO Min Euoo-sung was quoted as saying by Yonhap News.
The CEO has made it clear a number of times that KDB is interested in M&As. Min said at a press conference earlier last week that it is considering M&As abroad to expand its overseas deposit base. He added that M&As in the local market are also under consideration.
The remarks suggest KDB is a potential buyer of KEB.
However, Min pointed out that KEB has already risen too much in terms of price.
The bank closed at 13,950 won per share Friday, nearly tripling from a year ago when it traded at around 5,000 won.
Potential buyers of KEB have been increasingly losing interest in KEB following the global financial crisis. HSBC (NYSE:HBC) , which gave up its plan to buy KEB, said that it is not planning to buy a domestic financial business.
Nonghyup, the farmer's bank that was one of the strongest candidates to buy KEB, is also focusing on reform rather than M&A efforts.
Analysts are also giving a reserved outlook on KEB, estimating that it will lose its attractiveness as financial businesses from the United States and Europe are put up for sale in the M&A market following the global financial crisis.
"The bank should be evaluated conservatively, based on its essential value," KB Investment & Securities analyst Jeon Jae-gon said in a report.
The KDB CEO made it clear that the local retail financing market is already a "red ocean" market, with not much to gain due to fierce competition. He said that KDB won't compete with local players in this market. Rather, it will develop project financing businesses abroad.
Min said that KDB is especially interested in the Asian market. At the press briefing last week, he said that it is eying on two or three banks in the region.
Indonesian media recently reported that KDB is interested in acquiring an Indonesian bank.
Min is also chairman of KDB Financial Group, which has five subsidiaries with aggregate assets of 1.6 trillion won.
He hinted that the acquisition could take place soon, explaining that the acquisition could enhance KDB's value ahead of its listing on the stock market, which the bank plans by around 2011.
