Press Releases

IFC Supports Hana Bank in Seoul Bank Privatization

Desmond Dodd
Phone:  (202) 473-7194

Fax:  (202) 974-4384


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

Hana Bank