Magazine article American Banker

Hanmi Amends Woori Deal, Freeing It to Pursue Others

Magazine article American Banker

Hanmi Amends Woori Deal, Freeing It to Pursue Others

Article excerpt

Byline: Rachel Witkowski

Hanmi Financial Corp. is free to pursue other deals after amending an oft-delayed agreement with a patient investor.

Woori Financial Holdings Co. Ltd., which is largely owned by the South Korean government, on Monday permitted Hanmi to explore other capital options. The companies have been unable to get regulatory approval for a capital infusion announced in May.

Since Woori disclosed plans to invest up to $240 million in the Los Angeles company, analysts expressed concerns the deal could hit snags with foreign and U.S. regulators alike. The deal, which would give Woori majority ownership in Hanmi, had become a double-edged sword. U.S. regulators ordered the $3 billion-asset Hanmi to raise capital but were not keen on the funds coming from another country.

U.S. regulators see this as having "a foreign, government-owned bank with a large position" in a U.S. bank, said Brett Rabatin, an analyst at Sterne, Agee & Leach Inc. "That has not been done before," Rabatin added. "It may still get approved, but I was not surprised" by the delay.

Other Korean-American banks posted tough third-quarter results, which may have contributed to regulatory concerns.

"I don't think the financials help ... but the key is, it's more politically driven," Rabatin said.

Rabatin pointed to Commonwealth Business Bank, a Korean-American bank in Los Angeles that faced regulatory delays with funding from South Korea's Hana Financial Inc. The deal, which would have given Hana a 37. …

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