S. Korea Fund To Buy Credit Card Co.

(Reuters) – A South Korean buyout firm is set to buy 31.7 percent of a credit card processing company from two banks, including a unit of Standard Chartered (STAN.L), for an undisclosed sum, a regulatory official said on Wednesday.

Vogo Fund has agreed to acquire shares in BC Card from Hana Bank, a unit of Hana Financial Group (086790.KS), and SC First Bank, a unit of Standard Chartered (2888.HK), a senior Financial Supervisory Service official said, confirming media reports.

The official, who did not want to be named because the deal was not officially announced yet, said the investment fund would likely conduct due-diligence on BC Card before sealing a final deal.

The Korea Economic Daily cited unidentified financial authorities as saying that Vogo was planning to raise its ownership of BC Card to above 50 percent.

BC Card was set up by banks in 1982 to share credit card processing systems and is now jointly owned by them.

In 2006, Vogo signed a memorandum of understanding to buy 59 percent of BC Card from Hana Bank and the banking units of Shinhan Financial Group (055550.KS) and Woori Finance Holdings (053000.KS) for an estimated 200 billion won ($159 million).

But the deal was delayed by legal issues involving the head of Vogo Fund, Byeon Yangho, a former finance ministry official.

Vogo and SC First Bank could not immediately be reached for comment. Hana Bank declined to comment.

The deal comes as local lenders are moving to bolster their own-brand credit card businesses. Selling stakes in BC Card would mean some banks would have to set up their own card processing networks.

Hana Bank is also in negotiations to sell a stake in its credit card unit to be launched this year to SK Telecom (017670.KS), South Korea’s top mobile carrier. [ID:nSEO81001]

Shares in Hana Financial rose 0.74 percent to 27,350 won by 0102 GMT, in line with the wider market’s 0.55 percent gain. ($1=1260.0 Won) (Reporting by Kim Yeon-hee; Editing by Jonathan Hopfner and Muralikumar Anantharaman)