Beefing Up Synergy Through M&As

KB Fin. Group to seek M&As to upgrade its competitiveness toward being a global entity

KB Financial Holding Co. is out to strengthen the operation of its non-banking affiliates, now that Chairman Hwang Young-key finished completing the management structure of the new financial holding company, which was launched last September.
Chairman Hwang will be seeking M&As in the sectors of securities, asset management and insurance, among others, to create synergy among its affiliates and make its non-banking sector competitive.
But management will give priority to beefing up Kookmin Bank's capital for its continued stable operation and M&As will be very cautiously pushed, therefore, in the areas of non-banking financial sectors, especially securities.
Chairman Hwang fears the financial environment will be very difficult this year and banks will try to find ways to survive through M&As with other financial institutions. He also believes competition in the financial industry will get tougher with the enforcement of the new Capital Markets Consolidation Law, which went into effect on Feb. 1, virtually removing all of the walls dividing the financial industry's various sectors.
The holding company needs to restructure its portfolio, as Kookmin Bank holds 96 percent of its stakes. At the beginning of the year, Chairman Hwang said the KB Financial Group must be a globally competitive financial group under its mid-to-long-term strategy. It has to achieve a scale of economy and improve its profits drastically by creating synergy among its affiliates and taking chances on M&As through stringent preparations.
The chairman said the management plan for this year will be to build a growth base through a tight operation and create synergy among the affiliates, taking advantage of the broad customer base and customer satisfaction, exchanging information and joint sales channels.
The holding company will do its utmost to help non-banking affiliates in their efforts to strengthen their operations in the areas of product development and improved services.
Hwang said Manchester United is strong because its players have very good ball-handling skills and respect each other and, likewise, KB Financial Group should sharpen the capacities of its affiliate and create a corporate culture for mutual trust among affiliates and maximize synergy like the famous English soccer club has done.
Chairman Hwang called for maximizing synergy among affiliates at the Ilsan Training Institute during the meeting of affiliate executives early in the year and results of the strategy have been emerging already.
As of Feb. 2, KB Investment and Securities, which have been mainly catering to corporate customers, changed to retail financing by introducing KB Plustar and has already sold 140,000 accounts through the Kookmin Bank retail network.
KB Investment and Securities has been named an advisor for Lotte Chilsung's pending take over of Doosan BG, backed up by Kookmin Bank's enormous funding capacity and the investment company's ability and experience in an M&A advisory capacity.
KB Futures started marketing the HTS "star trader global," a derivative product overseas, and kicked off its retail business activity. The company is offering its HTS overseas futures on five overseas exchanges including the Chicago Mercantile Exchange, Eurex, and the Singapore Exchange (SGX). Their E-Mini, S&P 500, Euro FX, Gold, Crude Oil ― altogether 54 products ― can be handled by KB Futures for inexpensive fees and come with diverse information to make its services competitive.
Accounts for overseas futures can easily be opened at any of Kookmin Bank's branches.
KB Financial Holding will move toward launching a group CRM market to integrate customer information held by each of its affiliates, start integrated customer special treatment and operate an integrated channel with a mid-to-long term maximum synergy creation strategy. It also plans to upgrade customer satisfaction levels through a group integrated royalty program.
KB Holding plans to operate an integrated channel from which any of its customers can have access to integrated financial services, anytime and anywhere.
Kookmin Bank plans to create synergy by operating an integrated branch system to handle exchange transactions, retailing, joint operation and the sale of multiple products. They plan to provide integrated financial services and convenience to its customers by taking advantage of the Internet connection linking all of its business units. nw

Chairman Hwang Young-key of KB Financial Holding Co.