Gov't to invest 260 bln won in Export-Import Bank

SEOUL, Jan. 9 (Yonhap) -- The government said Friday that it plans to invest an
additional 260 billion won (US$196 million) in a state-run trade bank as part of
efforts to improve the bank's financial soundness.
The Ministry of Strategy of Finance said the investment in the Export-Import Bank
of Korea (Ex-Im Bank) would be made by the middle of next week, without
elaborating on the exact data.
The plan, which comes after a combined 690 billion won in cash injections, is
expected to raise the bank's capital adequacy ratio by 0.4 percentage point to
9.56 percent and increase its loan provision capacity by 3.3 trillion won,
according to the ministry.
The move is in line with intensifying government efforts to help banks increase
lending to cash-strapped companies and households in the face of a growing number
of bad loans amid a global economic recession.
South Korean banks are struggling to bolster their falling capital adequacy
ratios, a key barometer of financial soundness that measures the percentage of a
bank's capital to its risk-weighted credit.
The average capital adequacy ratio of 18 commercial and state banks came in at
10.86 percent as of the end of September, down 0.5 percentage point from three
months earlier.
The Ex-Im Bank is considering issuing around $1 billion in bonds in overseas
markets and the ministry expects that the government's additional investment will
help lower borrowing costs by enhancing its overall credit ratings.
kokobj@yna.co.kr
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