Chairman Kim Jung-tae of Hana Financial Group made clear that the Korea Exchange Bank (KEB) will be a member of Hana Financial Group and, therefore, the group will meddle in its management as a holding company would with any affiliate of the group.

Chairman Kim’s statement is designed to clear up a misunderstanding stemming from the fact that Hana Bank and KEB will be managed separately as independent banks and therefore, no one can meddle in their management based on the statement by Hana Financial Group that ensures independent management of the two affiliated banks for five years. 

Kim said a holding company has the right to interfere with its affiliated companies under the pertinent laws guaranteeing rights for holding companies as major stakeholders.

He said, “Its been only three months since KEB has become a new family member of the Hana Group, and we will be able to build trust and friendship together as time goes by and finally come to a point where we can be merged in harmony.”

Kim said Hana and KEB have already agreed to jointly operate ATMs and charge the same service fees, and Hana Bank’s futures transactions will be done in the name of KEB’s futures transactions and turned over to KEB Hana Bank’s foreign exchange fund services for affiliate financial institutions. He said each bank has been exchanging financial services that brings more profits to each other.

The chairman said Hana Bank set up its operations overseas better than any of its domestic rivals, especially in China and Indonesia, and KEB has also been doing very well globally by establishing its presence in foreign countries where no other Korean banks have set foot.

Kim said both Hana and KEB have secured enough to be prepared for the EU debt crisis to rock the entire financial world and the impact on the Korean financial market will be limited at best.

He said it costs a lot to secure enough foreign exchange liquidity, but the banks have to be prepared to weather the crisis if it ever occurs, despite the heavy costs.

Regarding the management of the financial group, he said the major focus will be on risk management during the first half and a substantial build up loss provisions, ensuring that from the third quarter the operations will be better. This means that during the first and second quarters the group will try to improve its health, but from the third quarter they will push their strategies for growth. Hana Bank posted 1.32 trillion won in net profit in Q1, but it saved only 400 billion won due to various expenses related to the takeover of KEB.

“Joy Together” are the words that are hung in the chairman’s office on the 15th floor of the HSBC Life Insurance building in Seoul with J and T being the two initials of his name. He used to say that he is a closer like in baseball, and that he has to wrap up what his predecessor Kim Seung-yu started while he was running the group.

Kim said the group’s long-term objective is still the same °™ to be among the 50 largest global financial groups by 2015 with total assets amounting to 400 trillion won and capital of 30 trillion won.

He doesn’t see any problems meeting the target, knowing that Hana is strong in private banking and household finance, while KEB is strong in foreign exchange deals and corporate finance, although its non-banking sector may lag behind others.

Kim also said the creation of synergy between Hana and KEB is critical for their success and he will strengthen ‘smartphone banking,’ because eliminating direct window banking is very important to a bank’s success these days. Kim also said he will see that many financial retirement products will be offered by both Hana and KEB. He also pledged to introduce many ‘fusion’ bank products in cooperation with communication, retail, automobiles, and other industries. “Joy Together” will continue to be his management theme while he is running the group as chairman, he stressed.#