중앙데일리

Selling Banks Easier Said Than Done

July 10,2001
Comments made Monday by the country's top financial officials were generally regarded as an indication that the government intends to step up the effort to sell the banks it's come to own. But, despite the determined words, tangible results have yet to materialize, and there is even concern over whether the government is moving in the right direction.

The chairman of the Financial Supervisory Commission, Lee Keun-young, said on Monday that Deutsche Bank has expressed interest in acquiring Seoul Bank through one of its subsidiaries. The German bank may take on a minority stake of less than 50 percent for investment purposes, Mr. Lee said. "I have said as a member of the government's Public Fund Oversight Committee that it would be desirable for the buyer of the bank to be involved in the management."

However, to speed up the sale of Seoul Bank, the government may be willing to retract on its earlier position that the new owner of the bank must itself be a bank. It may have been premature for Mr. Lee to comment on a reported plan whose merits are questionable, financial industry officials said. "You have to question whether it is important to Korea's financial industry to sell a part of Seoul Bank to a foreign-owned financial subsidiary or maybe even a fund," an official at a large commercial bank said.

On the same day, Deputy Prime Minister Jin Nyum said that the government would open the way for bank ownership by large business groups. But that statement entailed a condition that the corporate group will have to commit a minimum amount of capital, most likely 50 percent of the combined owners' equity, in the financial business. Financial industry analysts said that, considering the scale of commitment in other business sectors, it is questionable whether a top-30 business group would be willing to cut that commitment just to buy a bank. Even Dongbu Group, which has a strong presence in the financial business, has already made a commitment to enter the semiconductor business, and Hanwha also has announced a plan to acquire a large insurance concern, Korea Insurance Co. Tong Yang, Daishin and Kyobo are other major business groups with already significant stakes in the financial business, but their financial conditions make bank acquisition a difficult prospect, analysts said.



by Song Sang-hoon




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