South Korea finance sector needs $10.5 billion
About $10.5 billion in public funds will have to be injected into ailing South Korean financial institutions before the end of the year, a top business newspaper reported Monday.
Officials at the Financial Supervisory Service and in the banking sector quoted by the Maeil Economic Daily newspaper said some 11.55 trillion won ($10.5 billion) would be needed.
They said the banking sector would need 8.7 trillion won, merchant banks would require 1.2 trillion won and insurers 1.65 trillion won.
The South Korean government has never made public a figure for the amount needed by the financial sector, which suffered badly in the Asian financial crisis of 1997-98.
South Korea has already poured billions of dollars into the restructuring of ailing banks. But analysts suggest more funds are needed to complete the restructuring.
The sources said that five commercial banks that could not meet a 10 percent capital adequacy requirement will need funds. It said Hanvit Bank was in worst condition, needing 1.5 trillion won. Peace Bank, Korea Exchange Bank, Kwangju Bank and Cheju Bank needed smaller sums.
Korea First Bank will need 3.53 trillion won in additional public financial support, Seoulbank 1.5 trillion won and the National Federation of Fisheries Cooperative more than 1 trillion won.
Four merchant banks that failed to meet an eight percent capital adequacy requirement will need between 200 and 300 billion won each to recapitulates, the report said.
Life insurance companies will require some 1.65 trillion won in public aid, with 1.5 trillion for Korealife Insurance Co Ltd. — (AFP)
© Agence France Presse 2000