December 14, 2009
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News: Hana Financial Goes Mobile
SK Telecom Co. and Hana Financial Group Inc. have entered into a partnership that will give SK 49 percent of the credit card giant's stock. SK is South Korea's largest mobile phone service provider with over 24 million customers. Hana Financial, the nation's fourth largest financial institution is hoping the deal will give its weak Hana Card credit card business a boost with access to SK's large customer base. It is estimated that nearly 95 percent of South Koreans have a mobile phone. The deal which will cost SK over $343 million in the purchase of 57.6 million Hana Card Co. shares is first subject to approval by the country's Financial and Antitrust regulators. The deal will help SK promote its new mobile financial services with the introduction of its next generation credit card payment services.
The deal couldn't come at a better time for both companies as SK's previous attempts to acquire a stake in a credit card business failed and Hana Financial's costly spin-off of its Hana Card could benefit from the added resources. In 2002, SK attempted to invest in the Jeonbuk Bank's card division but the deal fell through when regulators said it violates regulatory rules that prohibit a card company from altering major stock holders for three years after the company's establishment. SK plans on introducing its new credit card payment technology by the second quarter 2010.
Hana Financial launched its Hana Card on November 2nd which has a market share of only 4 percent. According to analysts Yang Jone In of Kaorea Investment & Securities Co., the nation's mobile phone credit card payment processing is forecasted to grow at an average of 21.5 percent annually over the next three years. Yang also says that SK will need to work with other financial institutions if the company expects to wheel in their customers.