Washington, D.C. January 16, 2003—The
International Finance Corporation (IFC), the private sector development
arm of the World Bank Group has made a US$50 million equity investment
in Korea’s Hana Bank. The financing will support Hana Bank’s strengthening
as it expands operations through a merger with Seoul Bank. As a result
of the merger, Hana Bank has become the third largest bank in Korea.
Korea Deposit Insurance Corporation (KDIC), a government entity and previously
Seoul Bank’s only shareholder, had maintained a 30.9 percent stake in
the post-merger Hana Bank. To further the Korean Government’s goal to
privatize the financial sector, the merger agreement stipulated that Hana
Bank or an investor of its choice will buy 60 percent of KDIC’s remaining
stake by December 2003, and the remaining 40 percent within the following
six months. In the first transaction related to this agreement, KDIC sold
10 percent of its holdings, or 6.1 million shares, on December 23, 2002.
IFC purchased 3.1 million shares as part of that sale.
Hana Bank, formerly the Korea Investment Finance Corporation, was converted
to a commercial bank under its present name in 1991. In 1971, IFC assisted
in the incorporation of Korea Investment Finance Corporation, which then
was the country’s first short term finance company. Through its most recent
equity investment, IFC today holds 8.6 million shares of Hana Bank, amounting
to 4.4 percent shareholding.
Mr. Karl Voltaire, Director of IFC’s Global Financial Markets Department
said, “Through this equity investment IFC is demonstrating its full support
for this privatization and merger. Seoul Bank’s operations gives Hana
Bank new scale, but the combination also marks the most significant and
innovative of Korea’s bank privatizations.”
Mr. Javed Hamid, IFC Director for East Asia and the Pacific commented,
“IFC has had a long and mutually beneficial relationship with Hana Bank,
and today we congratulate Hana Bank’s management on this bold and forward-looking
transaction. We were pleased to have met our client’s financing needs
at this crucial stage.”
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people’s lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets and provides technical assistance and
advice to governments and businesses. Since its founding in 1956, IFC has
committed more than $34 billion of its own funds and arranged $21 billion
in syndications for 2,825 companies in 140 developing countries. IFC’s
committed portfolio ay the end of FY ’02 was $15.1 billion, with an additional
$6.5 billion held for participants in loan syndications. For more information
on IFC, please visit www.ifc.org.