Korea needs globally competitive bank to weather crisis

Kamco CEO said country needs a megabank capable of attracting stable funding in global financial markets.

South Korea's banking industry, dominated by four financial groups, needs a national champion that's strong enough to compete globally and withstand the funding pressures that swept the country into the global credit crunch, according to Korea Asset Management Corp.

"Our country doesn't have a main player that could attract stable funding in the global financial markets," Chief Executive Officer Lee Chol Hwi, 56, said in an interview in Seoul. "Size does matter for you to secure a pipeline of funds, even during times of crisis."

South Korea is drawing up plans on how to sell a 57 percent government stake in Woori Finance Holdings Co., owner of the nation's second-largest bank. The sale could trigger consolidation in the industry, with the Financial Services Commission considering a merger of Woori with one of its rivals as an option for the privatization.

Lee, who last year withdrew his candidacy to run KB Financial Group Inc., the holding company that houses South Korea's biggest lender, didn't comment on the sale of Woori Finance. His term at Kamco, as the state-run agency is known, ends in December. Lee may reconsider applying for the post at KB Financial, which has been vacant since September, he said without elaborating.

View the full story in Bloomberg.