S. Korea to pour 1 tln won into troubled savings banks

SEOUL, Dec. 3 (Yonhap) -- South Korea's financial watchdog said Wednesday that it will inject 1 trillion won in public funds this month to help savings banks cope with bad loans.
The bailout funds are the first large scale injections into financial
institutions since 2003. The state-run Korea Asset Management Corp. to take over
164 private financing arrangements that have turned bad, the Financial Services
Commission (FSC) said.
The regulator said 89 savings banks have provided 12.2 trillion won in private
financing to areas such as construction, but repayment problems have surfaced
with the deepening economic slump.
There has been persistent speculation that some savings banks may collapse due to
bad loans tied up in construction and real estate deals.
The FSC also said that savings banks that are experiencing problems will have to
engage in workout programs, including measures to increase capital by large
shareholders and seek mergers with other firms.
yonngong@yna.co.kr
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