KB Financial Chairman Lim Studying Non-Banking Takeover Targets
KB Financial Group Inc. (105560), the owner of South Korea’s largest lender, will consider takeovers to improve profit at its non-banking businesses, Chairman and Chief Executive Officer Lim Young Rok said.
“We’ve been reviewing various M&A targets to strengthen our non-banking businesses and to diversify our profit sources,” Lim said in a press briefing in Seoul today without naming potential targets.
Lim pledged in his inaugural speech last month to improve businesses at KB, saying its management efficiency and stock price lag behind peers, and that he will focus on sound asset growth and bolstering non-banking businesses. South Korean lenders, which posted a 56 percent plunge in second-quarter profit, are seeking growth in fee-generating businesses as low interest rates and rising soured loans erode earnings.
Lim replaced Euh Yoon Dae who ended a three-year term without meeting a goal to diversify the company and boost non-banking profit to 30 percent of earnings.
“We’re continuing the efforts to meet the goal,” Lim said today.
KB shares have fallen 4.8 percent this year to 36,100 won as of 2:34 p.m. in Seoul, making them the worst performer among South Korea’s five largest banking groups by market value. The country’s benchmark Kospi Index has lost 4 percent.
The chairman declined to comment whether KB will bid for Woori Finance Holdings Co. (053000)’s banking units or brokerage unit, which are being sold by the South Korean government.
South Korea in June said it will sell Woori Finance’s assets in three parts after failing to attract buyers for its 57 percent stake as the government tries to recoup taxpayer money spent more than a decade ago to bail out the nation’s banks.
The government put Woori’s regional lending units Kwangju Bank and Kyongnam Bank up for sale last month and Woori plans to open bidding for its brokerage, asset management and savings bank units later this month.
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