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38021
Tue, 12/30/2008 - 14:29
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http://m.oananews.org//node/38021
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KDB, four state financial firms to increase loans by 19 pct
SEOUL, Dec. 30 (Yonhap) -- South Korea's five state-owned financial firms plan to extend a total of 69.7 trillion won (US$55.5 billion) in loans to companies and households next year as part of efforts to ease a credit crunch and boost the economy, the nation's financial regulator said Tuesday.
Next year's earmarked figure is up 19 percent from this year's planned 58.7
trillion won, according to the Financial Services Commission.
The Korea Development Bank (KDB), Industrial Bank of Korea (IBK) and three others
also plan to chip in 10.2 trillion won next year in order to help local financial
firms boost their financial health, it said.
The plan is the latest in a series of bank supports to help local lenders beef up
their capital base. The money would be used to boost lending or allow the banks
to bolster their capital bases.
According to the regulator, KDB and IBK plan to provide 20 trillion won to
cash-strapped companies, 14.5 trillion won of which will be provided to smaller
firms.
A total of 41 trillion won will be also provided to specific sectors such as
alternative energy seen as having growth potential. The financial firms also plan
to provide a total of 8.7 trillion won to households, it said.
The increased liquidity provision plan came as local financial firms and
companies suffer a credit squeeze amid a deepening economic slump. Local banks
are also suffering increased bad assets as companies delay debt payments.
The South Korean economy, Asia's fourth-largest, grew 0.5 percent on-quarter in
the third quarter of the year, the slowest pace in four years as exports and
domestic demand remained weak.
The Bank of Korea, the country's central bank, forecast earlier this month that
the economy would grow 2 percent next year, a sharp slowdown from this year's
estimated 3.6-percent gain, due to a drastic drop of exports.
But some global investment banks offered a bleaker picture on the economy,
forecasting that the economy may contract.
South Korea has pumped funds into the financial system, cut taxes and boosted
public spending to limit fallout from the global credit crisis.
The central bank has slashed its key rate by 2.25 percentage points since
October, the most aggressive-ever cuts. Earlier this month, the bank cut the rate
to a record low of 3 percent.
sam@yna.co.kr
(END)
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Next year's earmarked figure is up 19 percent from this year's planned 58.7
trillion won, according to the Financial Services Commission.
The Korea Development Bank (KDB), Industrial Bank of Korea (IBK) and three others
also plan to chip in 10.2 trillion won next year in order to help local financial
firms boost their financial health, it said.
The plan is the latest in a series of bank supports to help local lenders beef up
their capital base. The money would be used to boost lending or allow the banks
to bolster their capital bases.
According to the regulator, KDB and IBK plan to provide 20 trillion won to
cash-strapped companies, 14.5 trillion won of which will be provided to smaller
firms.
A total of 41 trillion won will be also provided to specific sectors such as
alternative energy seen as having growth potential. The financial firms also plan
to provide a total of 8.7 trillion won to households, it said.
The increased liquidity provision plan came as local financial firms and
companies suffer a credit squeeze amid a deepening economic slump. Local banks
are also suffering increased bad assets as companies delay debt payments.
The South Korean economy, Asia's fourth-largest, grew 0.5 percent on-quarter in
the third quarter of the year, the slowest pace in four years as exports and
domestic demand remained weak.
The Bank of Korea, the country's central bank, forecast earlier this month that
the economy would grow 2 percent next year, a sharp slowdown from this year's
estimated 3.6-percent gain, due to a drastic drop of exports.
But some global investment banks offered a bleaker picture on the economy,
forecasting that the economy may contract.
South Korea has pumped funds into the financial system, cut taxes and boosted
public spending to limit fallout from the global credit crisis.
The central bank has slashed its key rate by 2.25 percentage points since
October, the most aggressive-ever cuts. Earlier this month, the bank cut the rate
to a record low of 3 percent.
sam@yna.co.kr
(END)
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