The end of the beginning
Two years ago the Korean banking sector was in crisis. Foreign banks were nervous of making acquisitions. Today, although total banking-sector losses are still high, a core of mid-sized profitable banks has emerged. None, though, is large enough to prosper in the long term and the race is on to find complementary partners in an increasingly competitive market. Simon Brady reports
It was the job no one wanted. Seoulbank, bust and in government hands, had already failed to attract a foreign buyer. HSBC, the most serious suitor, was not prepared to pay the asking price once it looked closely at the books. It had progressed as far as signing a memorandum of understanding with the Korean government back in February 1999. After months more of negotiations the deal fell apart.
At that point, the government decided its only hope of getting back any money was to privatize Seoulbank as a going concern via an IPO. To do that it needed an institution and management that could turn the bank around.
The government appointed Morgan Stanley, its adviser on other sales, such as that of Korea First Bank, to Find an institution willing to take a management contract for the bank. No-one wanted the job. The US investment bank teamed up with international head-hunters Egon Zender in an attempt at least to Find a chief executive officer.