Press Release(of Commercial Bank of Korea & Hanil Bank) of July 31, 1998

Joint Press Conference upon Announcement of Merger between

the Commercial Bank of Korea and the Hanil Bank

Confronted with the worst economic crisis ever since the nation's foundation and realizing that without an early recovery of the financial industry there is no other way to overcome current problems, the Commercial Bank of Korea and the Hanil Bank arrived at the conclusion to form a merger with the intention of embarking on a second ambitious launch.

Merger conditions

1. Form of merger : one-to-one merger

2. Merger allotment : to be determined utilizing due diligence results of outside experts

3. Name of bank : to decide on a new name through the invitation of public subscription, however to use Commercial Hanil Bankin the meantime

4. Registration of merged bank

O As the merger to be pursued is a one-to-one merger, it should be regarded as a newly formed merged bank. However, as the formation of a new merged bank entails many legal and economic constraints, such as prohibition of being listed on the exchange for 5 years, the merged bank will be built on the Commercial Bank of Korea, which has a longer history of the two.

5. Others

O For a smooth transition, the two banks will form a merger committee with equal number of members and, in close cooperation with the government, determine detailed matters as well as a timetable for the merger

As is well known, many domestic financial institutions are suffering from serious management difficulties due to the accumulation of non-performing loans. Our banks chose to join our resources as a way to build a leading bank equipped with international competitiveness, thus spearheading the normalization of the Korean financial industry and contributing to the early recovery of the economy.

However, in order for the voluntary merger of our two banks to succeed the following have to be fulfilled

- an accountable management system through drastic management improvement

- efficient organization and manpower structure

- early resolution of non-performing loans

- capital injection from international investors

Government support is also essential for this merger to bear fruit

- active support toward resolution of existing non-performing loans

- active support toward capital injection

- in addition ongoing interest and guidance from the public is also important

A word to supportive customers and shareholders of the Hanil Bank and the Commercial Bank of Korea

- our banks through a voluntary merger will take a big leap forward to become a world-class bank

- we will become a financially sound bank offering quality service and will provide greater protection toward customers' assets

- we also realize that our shareholders had suffered greatly owing to significant drops in stock prices, while receiving no dividend payouts and promise to make up for your sufferings through sound management practices in the future