The Financial Services Commission (FSC) of South Korea has given its consent to Korea Exchange Bank (KEB) to spin off its credit card division for a merger, which would lead to creation of a new banking company.
The regulator’s consent is a prelude to the scheduled merger between the KEB and Hana Bank, another affiliate of Hana Financial Group, reports Yonhap News Agency.
In May, FSC had given preliminary approval for the card firm’s spinoff, but with a condition that KEB establish a separate computer system for the new firm in order to prevent the data of credit card clients from being transmitted to the bank without their consent.
FSC has verified the separation of the system and tested the safety of its data storage and transfer process.
With the FSC approval, the new card company is expected to merge with Hana SK Card, the credit card unit of Hana Financial, as early as this year.
The consolidated firm would take up a market share of nearly 8%, up from 4.6% that Hana SK Card held as of end-December.
According to the FSC, the KEB’s credit card division had assets of KRW2.7 trillion as of the end of March, with KRW9.3 billion in net profit for the January-March period.