StanChart-HSBC's new challenge

THE battle for a controlling stake in Korea's KorAm Bank, targeted by Standard Chartered, HSBC and Citigroup, has intensified, with a rival saying it may launch a joint bid with South Korea's largest lender.

Temasek, the Singapore government's powerful investment arm, said it was open to a partnership with Kookmin Bank. Kookmin chief Kim Jung-tae earlier said his bank would help Temasek if it landed the $1bn (£587m) KorAm stake. Kim did not elaborate.

Private equity fund Carlyle Group and JP Morgan are unloading their 36.6% holding in KorAm. Previously analysts had seen Temasek as an also-ran in the four-way contest.

Kookmin and Temasek work together in other markets. Late last month the two were the principal members of a consortium that won initial agreement to buy a controlling stake in Bank Internasional Indonesia, that country's sixth-largest lender.

Temasek has raised its international profile this year. In addition to BII it bought Indonesian lender, Bank Danamon, in June.

Analysts say the race for KorAm is too close to call. But they note StanChart has built a stake of nearly 10%, making it the secondlargest shareholder behind Carlyle-JP Morgan.

The duo picked up the 36.6% stake during the financial crisis of the late 1990s and agreed to hold it for a minimum of three years. That lock-up is now coming to an end.