Standard Chartered has been trying to open a brokerage business in South Korea since it acquired former Korea First Bank for US$3.3 billion in 2005.SEOUL - Standard Chartered is highly likely to beat local lender Kookmin Bank in buying a small South Korean securities firm, a newspaper said on Thursday, a deal that could be worth up to US$260 million.
Standard Chartered has been trying to open a brokerage business in South Korea since it acquired former Korea First Bank for US$3.3 billion in 2005.
The Chosun Ilbo cited an unnamed industry source as saying that SC Korea First Bank, Standard Chartered's wholly owned unit, has been negotiating with the top shareholder of Hannuri Investment and Securities and an agreement is pending.
Previously, a Merrill Lynch analyst had estimated Hannuri might be sold for 200 billion to 250 billion won (US$211.6 million-US$264.6 million) to Kookmin, which had pulled out of an auction for a one-branch brokerage, KGI Securities, in May.
A senior regulatory official said it's not clear where the deal to sell Hannuri Investment stands.
Unlisted Hannuri, established in 1995, is 93 per cent owned by foreign investors, including US-based JDK Investment, the top shareholder.
It earned 10.7 billion won (US$11.32 million) in the fiscal year ended in March, with a paid-in capital of 50 billion won, according to its filing with the Financial Supervisory Service.
It had a 1.7 per cent market share as of March.
Asia-focused Standard Chartered has been trying to open a brokerage business in South Korea since it acquired former Korea First Bank for US$3.3 billion in 2005, a source had told Reuters.
But it failed to win a licence as regulators were worried allowing new entrants to the already-crowded industry.
Banks are on the prowl for small domestic brokerages to move into the country's booming derivatives and fund markets, which are set to benefit from the Capital Markets Integration Act.
The act, which goes into effect from 2009, is designed to give securities houses a bigger role in reshaping the country's financial sector.
Shares in Kookmin rose 0.82 per cent to 73,900 won by 0242 GMT, underperforming the wider market's 2.52 per cent gain. -- REUTERS
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