KL names troubled banks

KL names troubled banks

KUALA LUMPUR (Dow Jones): Malaysia's Finance Minister Anwar Ibrahim said yesterday a number of commercial banks have been identified as needing help from the central bank's newly announced recapitalization fund.

Although he didn't name the banks involved, he said 2.5 billion to 3.5 billion ringgit would be needed in the next few weeks.

"We are talking in terms of a 16 billion ringgit program," for the whole banking sector, Anwar said. "What we will require immediately is 2.5 billion ringgit to 3.5 billion ringgit, just to go on for the next few weeks."

The recapitalization fund, known locally as Danamodal, is run by Bank Negara Malaysia, but is designed to be largely funded by private and overseas institutions, including multilateral agencies like the World Bank and Asia Development Bank.

Danamodal will buy strategic stakes in the banks and then force them to merge to create stronger institutions.