Seoul Bank (), known from 1976 to 1995 as Seoul Trust Bank (), was a major bank in

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...

, originally established as a regional bank in 1959. By the mid-1990s, it was one of the five most prominent Korean banks, together with

Chohung Bank Chohung Bank Co., Ltd. (CHB; , sometimes transcribed as Joheung Bank) was a bank company headquartered in Seoul, South Korea. It was formed by the 1943 merger of Hanseong Bank (), established in 1897 and sometimes referred to as Korea's first ban ...

, Korea Commercial Bank, Korea First Bank, and

Hanil Bank The Hanil Bank () was a financial institution first established in Korea under Japanese rule, initially as Chōsen Trust (, 1932-1946) then renamed Joseon Trust Bank (, 1946-1950) and Korea Trust Bank (, 1950-1954) in South Korea. In 1954, it merg ...

. It was determined to be insolvent during the

1997 Asian financial crisis The 1997 Asian financial crisis gripped much of East Asia, East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide eco ...

, however, and was taken over by the Korean authorities, then merged into

Hana Bank Hana Bank (), known from its initial establishment in 1971 to 1991 as Korea Investment Finance Corporation (), is one of South Korea's largest banks. It merged with Seoul Bank (est. 1959) in 2002, then with Korea Exchange Bank (est. 1967) in 201 ...

Overview

Seoul Bank was established in December 1959 as part of the

Bank of Korea The Bank of Korea (BOK; ) is the central bank of South Korea and issuer of South Korean won. It was established on 12 June 1950 in Seoul, South Korea. The bank's primary purpose is price stability. For that, the bank inflation targeting, targ ...

's policy of favoring the creation of regional banks across the country. As such, its activity was initially concentrated in the

Seoul Metropolitan Area The Seoul Metropolitan Area (Sudogwon; , ) or Gyeonggi (region), Gyeonggi region (), is the metropolitan area of Seoul, Incheon, and Gyeonggi Province, located in north-western South Korea. Its population of 26 million (as of 2024) is ranked ...

. It soon expanded beyond that remit, however, by opening a branch in 1962 in the central Nampo-dong neighborhood of

Busan Busan (), officially Busan Metropolitan City, is South Korea's second list of cities in South Korea by population, most populous city after Seoul, with a population of over 3.3 million as of 2024. Formerly romanized as Pusan, it is the economi ...

. In August 1976, Seoul Bank absorbed Korea Trust Bank, and changed its name to Seoul Trust Bank. It kept that name for nearly two decades before changing it back to Seoul Bank in June 1995. Meanwhile, it was privatized in 1982, as part of the limited financial liberalization effort undertaken by then-president

Chun Doo-hwan Chun Doo-hwan (; 18 January 1931 – 23 November 2021) was a South Korean politician, army general and military dictator who served as the fifth president of South Korea from 1980 to 1988. Prior to his accession to the presidency, he was the cou ...

. In December 1997, the Korean government took over Seoul Bank after it had been determined to be insolvent, diluting the existing shareholders by a factor of 8 to 1 under targeted emergency legislation. As a consequence, the government together with the recently established

Korea Deposit Insurance Corporation The Korea Deposit Insurance Corporation (KDIC) is a South Korean deposit insurance corporation, established in 1996 to protect depositors and maintain the stability of the financial system. The main functions of KDIC are insurance management, ri ...

held a combined equity stake of about 94 percent, similar to the simultaneously rescued Korea First Bank. The government started a process to sell Seoul Bank in 1998. In February 1999,

HSBC HSBC Holdings plc ( zh, t_hk=滙豐; initialism from its founding member The Hongkong and Shanghai Banking Corporation) is a British universal bank and financial services group headquartered in London, England, with historical and business li ...

announced its purchase of a 70-percent stake, but that proposed transaction was called off six months later. In August 2002, it was announced that Seoul Bank would be merged with Hana Bank, as the latter had been selected in a competitive bidding process against

Lone Star Funds Lone Star Funds, legal name of main entity Lone Star Global Acquisitions, Ltd. is a global private equity firm that invests in corporate equity, real estate, credit, and other financial assets. The founder of Lone Star established its first fu ...

References

Defunct banks of Korea Banks established in 1959 {{bank-stub

Overview

See also

References