Align Partners Withdraws JB and BNK Merger Request, Urges Solutions for Regional Bank Crisis

Respect for Board Decisions… Regret Over JB Financial Group's Lack of a Vote

Structural Crisis Facing Regional Banks… Board Must Propose Solutions

Align Partners Asset Management announced that it would withdraw its request for a merger review from the boards of directors at JB Financial Group and BNK Financial Group. However, it called on the boards to explain why a merger review would not be pursued and to present strategies for addressing the structural crisis faced by regional banks going forward.

On September 10, Align Partners stated it had sent this follow-up shareholder letter to the boards of JB Financial Group and BNK Financial Group.

Previously, on July 14, Align Partners publicly proposed that both companies’ boards establish a special committee composed of independent directors and appoint leading global investment banks and strategy consulting firms as advisors to examine the strategic and financial rationale for a potential merger. In response, both companies disclosed on July 28 that they would not proceed with such a review.

Align Partners criticized both boards for simply announcing their conclusion without explaining the reasoning behind their decisions. It also pointed out differences in how the two companies handled the proposal. The BNK Financial Group board tabled the proposal as an official resolution and conducted a vote, while JB Financial Group merely reported the matter to its board without holding a vote.

Changhwan Lee, CEO of Align Partners, stated, “It is highly unusual from the perspective of shareholders, including institutional investors and proxy advisory firms, for a board to issue a simple conclusion in response to a publicly raised strategic proposal by shareholders, without providing reasoning or alternative solutions. The board should clearly explain why the public proposal from a major shareholder was not accepted, whether alternatives were considered, and what the company believes to be the best course of action for shareholders.”

While withdrawing its request for a merger review, Align Partners urged both groups to present solutions for overcoming the structural crisis in regional banking. This demand stems from the belief that regional banks are losing competitiveness due to ongoing population decline in Yeongnam and Honam, local economic contraction, an entrenched oligopoly led by major commercial banks, the rise of internet banks, and the heavy investment required for artificial intelligence (AI) transformation. The original merger review request was also made in this context.

CEO Lee added, “The structural crisis facing regional banks is an undeniable reality, and through this public campaign, we confirmed widespread consensus on the issue from a broad range of stakeholders. Since formulating a long-term crisis response strategy and providing transparent explanations are core board responsibilities, we have requested further clarification through a private follow-up letter.”

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