DGB Financial Tenders 1 Tril. Won in Kyongnam Bank Deal

SEOUL, KOREA- In a preliminary bidding to sell off Kyongnam Bank and Kwangju Bank, it turned out DGB Financial Group (formerly Daegu Bank) and the Gwangju & Jeonnam Chamber of Commerce and Industry were the highest bidders. According to banking sources on September 25, DGB Financial tendered a price of 1 trillion won for the acquisition of Kyongnam Bank on the 23rd, approaching 100 percent of its price-to-book ratio 1.1 trillion won.

Other bidders for the Kyongnam Bank deal, including BS Financial Group (formerly Busan Bank), Industrial Bank of Korea, Gyeongnam & Ulsan Chamber of Commerce and Industry consortium, suggested prices at the price-to-book ratio level of 0.8 to 0.9.

As for the deal to acquire Kwangju Bank, the Gwangju & Jeonnam Chamber of Commerce and Industry led the seven bidders in terms of preliminary bidding price at 600 billion won, about the price-to-book ratio of 0.8. Other bidders such as Shinhan Financial Group, JB Financial Group (Jeonbuk Bank), BS Financial Group, and DGB Financial Group proposed prices ranging between 250 and 450 billion won.

An investment banker said, "Bidders tendered much lower prices than the book value for Kwangju Bank maybe because they figured the bank's profitability wouldn't be much higher."

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