Seoul Bank to stand on its own two feet

Seoul Bank will survive on its own and not be incorporated into a financial holding company with the support of public funds from the government. The chairman of Seoul Bank, Kang Jeong Won, revealed on the 10th that the bank is expected to announce the results of the evaluation made on Seoul Bank by Deutsche Bank. Together with the evaluation results, the required capital increase size for rehabilitation will also be disclosed. According to chairman Kang, the public funds promised by the government will be sufficient to normalize operations. The government`s capital injection size will be made at a reasonable level, where share price will not be adversely affected.

Having received a pledge by the government that Seoul Bank will remain autonomous, pro-active efforts are being made to rehabilitate the bank.

For the first time since the 1997 foreign currency crisis, Seoul Bank was successful in raising funds on a credit basis without any collateral. US$50 million will be received from a U.S. bank on the 14th. Lending conditions set for the facility at maturity of 1 year and interest rate of LIBOR + 0.55% has been appraised to be relatively favorable for a domestic bank. From this week 20 management experts from Deutsche Bank will be dispatched to each division of the bank to participate indirectly and directly in management duties such as realignment of personnel and division work.

Lee Na-Yeon larosa@donga.com