Press Release (of Hana Bank & Boram Bank) of September 8, 1998

Joint Press Conference upon Announcement of Merger between Hana Bank and Boram Bank

On September 8, 1998, Hana Bank ranked 11th in terms of total assets, and Boram Bank, ranked 13th, have exchanged a Memorandum of Understanding for a merger between the two banks.

The merger represents birth of a leading nationwide commercial bank with a competitive position in the international banking operations. The combination of Hana Bank's top ranking profitability and Boram Bank's top ranking customer satisfaction will allow the merged bank to provide quality services to its customers with an optimal level of satisfaction by equipping the combined network of approximately 250 branches nationwide with advanced financial products and services.

To effectively meet the needs of middle to high income individual customers and small to medium sized corporates, the merged bank aims to become a Financial Services Group by the year 2002 with total assets of over KRW 100 trillion and total capital of over KRW 4 trillion by setting up businesses specializing in insurance, mortgage lending, mutual fund management, discount brokerage, asset management and investment banking either through M&As or establishment of subsidiaries.

During the merger process, the government will extend its full and direct support to the two banks by means of purchasing much of its bad assets, thus improving both profitability and asset quality of the merged bank. Based on this combined profitability and asset quality, the Banks will consider promotion of an additional M&A, increase of capital and acquisition of foreign capitals. Not only the merged bank will further increase its capital in addition to the recent acquisition of a foreign capital from an internationally reputable institution, IFC who has become the second largest shareholder of Hana Bank, but also will effectively utilize an overall risk management procedures adopted through IFC.

In line with raising its profitability, the merged bank will adopt a system in which the corporate structure will be reorganized into independent business units and employee's salaries will be decided on a performance basis, thus increasing the efficiency and the profitability per employee to a level comparable to that of financial institutions in developed countries. To improve operational efficiency, the merger will involve a personnel reduction of approximately 400 staffs from both banks.

As for the merger ratio, a designated accounting firm will conduct a due diligence on both banks and calculate and present to the Banks a share exchange ratio based on the net asset value as of June 30, 1998. The Banks will mutually decide the final share exchange ratio based on the accounting firm's recommendation.

The name of the merged bank will be decided by mutual agreement of the two Bank's presidents prior to the shareholders' meeting for merger approval. Should an accord not be reached, however, the Banks will appoint an independent market research firm to select one of the two existing names based on market recognition and preference.

The Banks will set up a M&A committee consisting of 50 staffs from the two banks and have an accounting firm evaluate the assets and liabilities of the two banks and calculate the share exchange ratio during September 1998. Upon the completion of shareholders' meeting for the merger approval and the acquiring of approval from the Ministry of Finance and Economy before the end of the year, the merged bank will be officially registered in January 1999.