Hana Bank on the Move

Hana Bank to acquire stakes in Jilin Bank in China and two banks in the U.S.

The Hana Financial Group is set to buy a 20 percent stake in Jilin Bank in Jilin Province, northeastern China, and is now awaiting the approval of the Chinese financial authorities, the group said recently.
The group, which includes Hana Bank as its major affiliate, said negotiations with the Chinese provincial bank were completed on June 19.
Hana Financial Group has picked up where it left off after settling a tax payment of more than 1 trillion won with the financial authorities and has resumed its overseas business expansion through M&As, the group said.
Jilin Bank is the largest commercial bank in Jilin Province, the result of the mergers of a number of small banks in the province including a commercial bank in Jiangchun City and another commercial bank in Jilin City.
The group said it would have to pay 300 billion won for a 20 percent stake in the local Chinese bank with 210 branches in Jilin Province. The CEO of Jilin Bank was expected to visit Seoul soon to iron out details of the deal.
Hana Bank would be the second domestic bank to acquire a stake in a foreign bank after Kookmin Bank when the deal is completed. Kookmin took over a 50 percent stake in the Center Credit Bank in Kazakhstan for 1 trillion won earlier this year.
President Kim Chung-tae of Hana Bank said foreign investors are allowed to acquire up to a 20 percent stake in a bank in China. He said Hana will use Jilin Bank as a bridgehead to take over more stakes in three local banks operating in Jilin Province and advance into North Korea, as Jilin Province borders North Korea.
The Hana Bank CEO said Hana will cooperate in most areas of Jilin's financial operations including funds, international banking, credit cards, electronic finance and management of risk, such as bad loans.
The group has been studying a plan dubbed the "New Silk Road"to expand its operations into North Korea via northeastern regions of China, especially Jilin Province.
Under the plan, the group has been making moves to buy stakes in a bank in the region since last year after setting up cooperative ties with the bank in many areas of banking.
The Chinese financial authorities are likely to approve Hana Bank's application to buy stakes in Jilin Bank, according to Chairman Jun Kwang-woo of the Financial Services Commission. He said that at his recent meetings in Beijing with top Chinese financial officials he asked them to favorably consider Hana's plan to start banking operations in the Northeast region of China. "They said they would,"Jun said.
Hana Bank has been stepping up its operations in China, by putting its entire operational network under Hana Bank Corp., a local subsidiary of the bank. On June 11, the bank obtained a license to deal in Renminbi, the Chinese currency, enabling it to set up deposit accounts in the Chinese currency, operate a credit card business and private banking with local customers.
The bank's Chinese subsidiary has seven banking facilities in such cities as Beijing, Shanghai and Qingdao and plans to expand its branches and other banking facilities to 42 by 2012, starting with the opening of a new branch in Jiangchun.
In the meantime, Hana Bank reached an agreement with the owner of Noah Bank in the northeastern part of the United States to buy a 24 percent stake in the bank for between $4 million and $5 million. The American bank, with $15 million in capital, has 10 branches in New York, New Jersey and Philadelphia. In addition, Hana also acquired a 37.5 percent stake in the Commonwealth Business Bank in California, run by Korean-American business interests, and is awaiting the approval of the Federal Reserve Board. nw

President Kim Chung-tae of Hana Bank.