Gwangju Chamber Warns JB-BNK Financial Merger Could Weaken Regional Economy

"Merger Talks Focus Solely on Asset Expansion and Shareholder Value"

The Gwangju Chamber of Commerce and Industry has voiced concerns and taken action in response to recent discussions about a proposed merger between JB Financial Group and BNK Financial Group, suggested by Align Partners Asset Management, citing the potential negative impact such a merger could have on the future of the regional economy and local finance.

On July 21, the Gwangju Chamber issued an official statement emphasizing, "Regional finance is not just a profit-driven business; it is a core financial infrastructure that provides funding to local companies and small businesses, and leads the virtuous cycle of capital within the region."

Exterior view of Gwangju Chamber of Commerce and Industry.

The Chamber further stated, "In a situation where concerns over the decline of provincial cities and concentration in the Seoul metropolitan area are intensifying, regional banks such as Gwangju Bank have played a key role by ensuring that capital does not flow out of the region but is reinvested locally." It evaluated regional finance as "a solid pillar of the regional economy, having grown over a long period based on strong trust with businesses in the Gwangju and Jeonnam region."

The organization also pointed out that the ongoing merger discussions have focused only on the expansion of total assets and the increase of shareholder value as simple financial effects. It criticized the process, saying, "There has been insufficient review and social discussion regarding the public function of regional finance and the impact on the local economy in the Honam area."

In particular, the Chamber highlighted the distinct characteristics and differences in financial demand between Honam and Yeongnam. "The main industries and financial needs of the two regions are clearly different, and simply combining corporate information and screening capabilities accumulated in each area does not guarantee that real synergy will be created," it stated.

Additionally, the Chamber raised concerns that since the business territories do not overlap, the expected cost reductions from integrating branches would likely be limited. It warned that an excessive merger could reduce the functions of corporate screening and local financial decision-making, ultimately shrinking financial support for small and medium-sized enterprises and small business owners in each region.

Accordingly, the Gwangju Chamber urged JB Financial Group and BNK Financial Group to consider not only short-term financial perspectives but also the public function of regional finance and the impact on balanced regional development. The Chamber asked that they prioritize gathering feedback from local governments, residents, and other regional stakeholders. It also called on the financial authorities to thoroughly examine the identity and public purpose of regional finance during the approval review process.

Han Sangwon, Chairman of the Gwangju Chamber, stated, "For the newly established Jeonnam-Gwangju Integrated Special City to broaden the future of local industry, the role of regional finance in supporting that growth is more important than ever." He added, "The Gwangju Chamber of Commerce and the broader local business community will actively cooperate so that Gwangju Bank continues to fulfill its role as the representative bank of the region and to ensure that the competitiveness and identity of regional finance are continuously maintained and strengthened."

This content was produced with the assistance of AI translation services.