Korea Development Bank (KDB), the lender that’s pursuing a stake in Lehman Brothers Holdings Inc, aims to become Asia’s third-largest bank within five years, CEO Min Euoo-sung said.
Min, whose state-owned bank will be privatized by the South Korean government by 2012, declined to comment when asked by Bloomberg News about the progress of talks with Lehman.
The US securities company slumped 13 percent in New York on Monday after analysts predicted larger writedowns and lower underwriting sales.
“Along with our privatization, we’ll actively make inroads into the overseas markets to take off as a global corporate and investment bank,” Min said in a speech to bankers at a seminar in Seoul yesterday.
“Considering the limited size and the profitability of the domestic market, KDB’s globalization is not an option, but a must,” he said.
Min, the former Seoul branch chief of Lehman, said he was hired for his ability to grow KDB globally. He faces opposition from the nation’s top regulator, which said on Monday that it would be “inappropriate” for Korea Development Bank to pursue an acquisition of Lehman.
At the end of last year, KDB had 146.9 trillion won (US$133 billion) in assets and 21.7 trillion won in shareholder equity, according to the company’s Web site. KDB’s net income last year of 2.52 trillion won, or US$2.37 billion, was just over half of Lehman’s US$4.2 billion in full-year profit.
Min said on Aug. 23, a month after being hired to prepare KDB for an initial public offering, that the global credit market turmoil provides him with a chance to expand abroad.
South Korea’s top regulator, Financial Services Commission Chairman Jun Kwang-woo, reiterated his earlier comments on Monday, cautioning KDB against taking over Lehman, which has lost 78 percent of its market value this year.
“I applaud the effort by KDB to become a global player, to branch out overseas,” Jun told reporters. “That said, I would advise careful consideration on timing, on whether the move makes sense in the long term, makes sound business sense for KDB.”
Min said he would give up all his stock options in Lehman if a transaction goes ahead.
The regulator said yesterday it would provide the government with draft privatization plans for Korea Development Bank, Industrial Bank of Korea and other state assets next month.
KDB is seeking to buy 25 percent of Lehman Brothers and wants a guarantee that would allow it to increase the stake up to 49 percent, South Korea’s Chosun Ilbo newspaper said last Wednesday, without saying where it obtained the information.
Lehman and KDB haven’t yet struck a deal because the two sides disagree on how much the US firm is worth, Min said on Tuesday last week.
Min hasn’t said how big a stake in the firm he would like to buy or how much his company would pay.
“To start with, we will enter the Asian market, including China and Southeast Asia, to position ourselves as the leading bank of Asia,” he said in his speech yesterdaty. “Then, we will expand our presence in the Americas and in Europe.”
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday. Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said. The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology. Two-nanometer wafers are the most
NEW GEAR: On top of the new Tien Kung IV air defense missiles, the military is expected to place orders for a new combat vehicle next year for delivery in 2028 Mass production of Tien Kung IV (Sky Bow IV) missiles is expected to start next year, with plans to order 122 pods, the Ministry of National Defense’s (MND) latest list of regulated military material showed. The document said that the armed forces would obtain 46 pods of the air defense missiles next year and 76 pods the year after that. The Tien Kung IV is designed to intercept cruise missiles and ballistic missiles to an altitude of 70km, compared with the 60km maximum altitude achieved by the Missile Segment Enhancement variant of PAC-3 systems. A defense source said yesterday that the number of
Taiwanese exports to the US are to be subject to a 20 percent tariff starting on Thursday next week, according to an executive order signed by US President Donald Trump yesterday. The 20 percent levy was the same as the tariffs imposed on Vietnam, Sri Lanka and Bangladesh by Trump. It was higher than the tariffs imposed on Japan, South Korea and the EU (15 percent), as well as those on the Philippines (19 percent). A Taiwan official with knowledge of the matter said it is a "phased" tariff rate, and negotiations would continue. "Once negotiations conclude, Taiwan will obtain a better
RSS