Regulator vows support for financial M&As

SEOUL, July 25 (Yonhap) -- South Korea's financial regulator said Monday that it plans to come up with measures to backstop mergers and acquisitions (M&As) among local financial firms in an effort to help nurture their global competitiveness.
"The domestic financial market is saturated due to excessive competition for expansion. Major financial firms should foray into overseas markets by beefing up their size via M&As," Kwon Hyouk-se, governor of the Financial Supervisory Service (FSS), said in a staff meeting.
"Measures should be provided to help local financial companies grow larger through M&As and tap into foreign markets."
Currently, the government is trying to sell its 56.97 percent stake in Woori Finance Holdings Co. Hana Financial Group Inc., the country's No. 4 banking group, is in talks with U.S.-based Lone Star Funds to acquire a 51.02 percent stake in Korea Exchange Bank, the fifth-largest lender in South Korea.
South Korean banks remain dwarfed by their foreign counterparts. The July edition of The Banker magazine showed only nine South Korean lenders made the list of the world's top 1,000 banks by core capital. None were included among the 50 largest lenders.
According to the FSS, local banks and other financial companies operated a total of 333 branches, subsidiaries and representative offices in 34 countries as of end-March.
Kwon's remarks come as local financial firms are embroiled in a cut-throat competition to acquire a bigger slice of the domestic market. The heated rivalry has prompted excessive loan extensions and credit card issuances, raising concerns on its impact on the country's financial health.
In a bid to minimize the fallout from excessive competition, the country's financial watchdog has introduced several plans such as capping credit card firms' marketing costs and new card issuances.