KB Financial interested in KDB Daewoo Securities

By Choi Kyong-ae

KB Financial Group plans to bid for KDB Daewoo Securities if its main creditor, the Korea Development Bank, puts the brokerage up for sale, an official said Monday.

“We have been eyeing KDB Daewoo Securities though the process for an auction (to sell off the company) has yet to begin. We will consider bidding for the securities company,” the official said, asking not to be named.

KB Financial, the country’s third-biggest financial company by assets after Shinhan Financial Group and Hana Financial Group, said it is seeking to acquire a brokerage to diversify its banking-focused portfolio into the non-banking businesses.

KB Financial said it earned 71 percent of its net profit of 944.6 billion won ($894 million) from the banking sector in the January-June period.

The state-run KDB and the Financial Services Commission reportedly plan to start the sale as early as late August. KDB owns a majority 43 percent stake in KDB Daewoo Securities, followed by the National Pension Service with a 7.5 percent stake.

KDB officials in charge of the sale of KDB Daewoo Securities could not be reached for comment.

Chairman and Chief Executive Hong Kyttack has said the state bank planned to sell KDB Daewoo Securities bundled with affiliates which have overlapping businesses in the private sector, according to the official.

The KDB affiliates include KDB Asset Management, KDB Capital and KDB Life Insurance. There has been speculation that KDB will sell KDB Daewoo Securities and KDB Capital in a packaged deal but the bank reportedly plans to sell the two companies separately.

The 43 percent stake to be up for sale is valued at 2.16 trillion won based on Friday’s closing price of 15,350 won. With the management premium counted to the acquisition price, it may rise to 2.5 trillion won to 3 trillion won, analysts say.

Along with KB Financial, China’s biggest state-backed conglomerate Citic Group is among potential bidders, according to local reports.

In the first half, KDB Daewoo Securities posted 229.32 billion won in net profit, jumping from 97.97 billion won a year earlier, according to a regulatory filing.