KB Financial not keen on bank mergers

The lender to focus first on organic growth by being a competitive local and diversified financial services group.

KB Financial Group has no intention of making a bid for another commercial bank, but instead will focus on becoming a competitive local and diversified financial services group, Euh Yoon-dae, the group chairman, told the Korea JoongAng Daily.

Euh’s comments are the strongest indication yet that KB, Korea’s second-largest financial group by assets, has ruled itself out from participating in an expected consolidation of the banking industry that the government hopes will create an internationally competitive superbank.

KB has frequently been mentioned as a likely candidate to buy Woori Financial Group, the Korea Exchange Bank or the Korea Development Bank, which is scheduled for privatization next year.

“When I talk about M&A (mergers and acquisitions), it doesn’t mean that we will buy a commercial bank, rather nonbanking sectors are more interesting,” said Euh.

He said that size “does not guarantee profit. What we need in Korea is more of an economy of scope rather than an economy of scale.”

Euh, who was named KB chairman in June, said he will first focus on organic growth over the next two years to boost the group’s shareholder value.

View the full story in JoongAng Daily.