Three Korean banks merge

Three Korean banks merge

SEOUL (AFP): Three debt-ridden South Korean banks on Thursday
announced they would merge to form a new institution boasting
US$51 billion in assets and an expected $2 billion in state
capitalization.

The announcement of plans to fuse Cho Hung Bank, Kangwon Bank
and Hyundai International Merchant Bank came as South Korea
rushed to complete its massive restructuring of the shattered
financial sector by the end of the year.

The new entity expects to receive 2.5 trillion won (US$2
billion) in share capital from the government while its assets
will total 62 trillion won ($51 billion), the firms said.

"It is almost certain that the government will extend the
support within this year," Cho Hung Bank acting president Lee
Kang-ryung told a news conference.

The amount of capital to be written off in return for
receiving government funds has yet to be decided, he said, adding
that the Financial Supervisory Commission would issue a directive
soon.