Gov`t to provide 1.65 tln won for state-run banks By Lee Joon-seung

SEOUL, Dec. 16 (Yonhap) -- The government said Tuesday that it will invest 1.65 trillion won (US$1.24 billion) in three state-run lenders to facilitate corporate loans and support export transactions.
The Ministry of Strategy and Finance said the capital injection will improve the
capital adequacy ratio of Korea Development Bank (KDB), Export-Import Bank of
Korea (Korea Eximbank) and Industrial Bank of Korea (IBK). The ratio is a key
barometer of a bank's financial soundness, and measures the percentage of a
bank's capital to its risk-weighted credit.
The total is a increase of 300 billion won from the 1.35 trillion won that Seoul
said it would invest into the three banks on Nov. 3 when it announced its
comprehensive economic recovery plan.
Of the total, 500 billion won will go to KDB and IBK each, with 650 billion won to
be invested into Korea Eximbank, according to the ministry.
It said improvement in capital adequacy will allow these banks to loan more money
to small- and medium- size enterprises (SMEs) and help exporters who are hard
pressed to get funds following the U.S. financial crisis and a general downturn
in the global economy.
Policymakers said that if companies can overcome current challenges, they will be
in a good position to grab increased market share once overall economic
conditions improve in the coming years.
South Korea's economy is expected to be hard pressed to pull off 4 percent growth
this year, with most think tanks predicting growth to drop into the 2 percent
range in 2009.
yonngong@yna.co.kr
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