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.