By Na Jeong-ju
Staff Reporter
Kookmin Bank and Shinhan Financial Group are raising a neck-and-neck race to become the largest financial services provider in terms of market capitalization.
Kookmin closed at 57,700 won per share, down 300 won, or 0.52 percent, from its previous close, Tuesday, while Shinhan's stock price dropped 1.11 percent to 48,850 won.
Kookmin regained the lead in market capitalization among all financial firms here only one day after it fell behind Shinhan. On Monday, Kookmin's market capitalization contracted to 19.51 trillion won as its stock price fell 6.45 percent. Shinhan closed down 3.3 percent on the same day, pulling down its market capitalization to 19.57 trillion won.
As of Tuesday, Kookmin's market capitalization stood at 19.41 trillion won, while Shinhan was at 19.35 trillion won.
It was the first time that Kookmin, the country's largest lender by assets and net profits, lost the lead in market capitalization. Shinhan has increased assets and expanded business platforms by acquiring Goodmorning Shinhan Securities, Chohung Bank and LG Card for the past years, while Kookmin has focused on sharpening edges in retail banking since it merged with Korea Housing Bank in 2001.
In 2007, Kookmin posted a net profit of 2.7 trillion won from sales of 21.3 trillion won, while Shinhan recorded 2.4 trillion won in net income from sales of 26.5 trillion won. As of Monday, foreigners have a combined stake of 79.1 percent in Kookmin, while foreign shareholding in Shinhan stood at 56.6 percent.
Analysts say more investors are paying attention to Shinhan's strengths in non-banking areas, such as brokerage, credit card and investment banking.
``Shinhan has successfully diversified income sources by acquiring securities and credit card firms, while Kookmin is not so competitive as Shinhan in non-banking sectors,'' said Baik Dong-ho, an analyst at Woori Investment & Securities. ``The closing of gap in market capitalization between Kookmin and Shinhan reflects sharper falls in Kookmin's stock prices in recent weeks.''
Shinhan's stock price has risen 8 percent since it hit the lowest point in 52 weeks at 44,550 won on Jan. 16, while Kookmin has seen its stock price fallen steadily. Tuesday's close of 57,700 won is the lowest point in 52 weeks for Kookmin.
``Kookmin is seeking to acquire non-banking firms as part of efforts to set up a holding company. Those efforts may positively affect its share prices,'' Baik said.