S. Korea drops plan to sell SeoulBank to Deutsche<\/p>\n
Judy Lee, Reuters, Seoul<\/p>\n
South Korea said on Wednesday it had ended talks to sell
\nSeoulBank to Deutsche Bank AG, the latest in a series of failed
\ndeals involving foreign banks as Seoul tries to clean up its
\ntroubled financial sector.<\/p>\n
DB Capital Partners had been in exclusive talks with the
\nKorean government for three months to buy between 30 percent and
\n51 percent of SeoulBank. DB's exclusive negotiating rights
\nexpired on September 30.<\/p>\n
\"The government will decide later whether to try again to find
\na buyer, or help bolster the bank to survive on its own,\" Park
\nSeung, head of the Public Fund Oversight Committee, told
\nreporters.<\/p>\n
The failed sale came a week after Citibank withdrew from a bid
\nto buy a credit card unit of Korea Exchange Bank, with the U.S.
\nlender saying it could not afford a new overseas investment due
\nto the Sept. 11 attacks on the United States.<\/p>\n
Plans to sell ailing Korea Life and Hyundai Group's financial
\nunits to foreign investors also have been delayed.<\/p>\n
SeoulBank was one of several lenders bailed out by the
\ngovernment after the Asian financial crisis, which toppled big
\ncorporations and saddled financial institutions with a mountain
\nof bad loans.<\/p>\n
With the overseas investment environment worsening, the
\ngovernment may seek to merge SeoulBank with a stronger bank or
\ncombine it into state-run Woori Financial Holding Co, Park said.<\/p>\n
Analysts were pessimistic.<\/p>\n
\"SeoulBank has too many branches and employees, compared with
\nits asset size, which is the biggest stumbling block for a sale,\"
\nsaid Yoon Yong-chul, a banking analyst at Goldman Sachs in Seoul.
\n\"Without more aggressive restructuring or just selling assets and
\ndeposits, the sale would be difficult.\"<\/p>\n
SeoulBank, with total assets of 21.2 trillion won (US$16.35
\nbillion), has 294 branches and 3,925 staff.<\/p>\n
The government tried to sell SeoulBank to HSBC Holdings in
\n1999, but the first attempt failed because of a price gap. Korea
\nthen selected Deutsche Bank as an adviser in April 2000 to help
\nturn the ailing lender around.<\/p>\n
Korea has spent 174.5 trillion won on the financial reforms to
\nbuy bank stakes, bad loans and bail out troubled lenders since
\nthe economic crisis and has so far recovered 15 percent of the
\ntotal, the Finance and Economy Ministry said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/s-korea-drops-plan-to-sell-seoulbank-to-deutsche-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}