ANZ kicks tyres in South Korea

ANZ has expressed interest in buying the controlling stake in Korea Exchange Bank, South Korean news agency Yonhap Infomax reported.

Reuters, Dow Jones and Financial Times separately confirmed ANZ's interest in buying the stake in KEB held by Lone Star Funds, a US-based private equity firm. Lone Star bought into KEB in 2003.

This is at least the third attempt by Lone Star to sell its stake in KEB. Local regulators derailed an effort to sell the bank to a bigger competitor in 2006. HSBC backed away from plans to buy into KEB in 2007 following the credit crunch.

Lone Star's 51 percent stake in KEB is valued at around 4.5 trillion won, or about A$4.4 billion, and would be a substantial cash call on ANZ in the event it emerged as a serious contender.

The sale process may take three months, the FT reported.

Merchandise trade between Australia and South Korea is about $27 billion annually on Austrade trade. That figure has been relatively unaffected by the financial crisis of 2008, with more than two thirds of the amount being exports from Australia, primarily of commodities.

Direct investment between Australia and Korea is slight, at less than $1 billion in each direction, according to the Department of Foreign Affairs and Trade.