Eye on the prize in Korea's banking sector

The likely privatisation of Woori Financial Group and possible sale of Lone Star’s stake in Korea Exchange Bank could result in the emergence of a Korean megabank this year.

Korean banks plan to get big in 2010. Indeed, this year promises the biggest shake-up in Korea's banking sector since 12 years ago when, during the worst of the Asian crisis, the government closed down a third of the country's merchant banks, nationalised some of the commercial banks and allowed foreign ownership of others. But, rather than retreat, Korean banks are now looking to become megabanks.

It might seem an odd objective when the US too-big-to-fail paradigm has suffered such...

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