A comedy of errors
The Korean government’s sale of Seoul Bank to another domestic player has upset foreign bidders . But the sale is likely to prompt further consolidation.
The Seoul Bank saga in Korea has not been the finest performance for a country keen to show the rest of the world that it's rapidly changing. In fact, it can best be described as a comedy of errors. But finally, in August, the curtain came down when Hana Bank won the right to take Seoul Bank out of government hands.
The administration was relieved: it will recoup some of the W156 trillion ($131 billion) it has pumped into the financial sector.
The story of Seoul Bank started in 1998 when the financial crisis almost wiped it out. Bad credit after bad credit tumbled out of its loan portfolio. That year, W5.6 trillion of taxpayers' money was injected into the bank to stop it from toppling over. Ever since, the government has desperately tried to recoup its money by selling the bank.
Unfortunately, selling such a distressed bank was never going to be easy.