Monday June 2, 08:44 AM
SKorea watchdog unveils timetable for bank privatisation
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SEOUL (AFP) - South Korea's financial watchdog unveiled a timetable Monday to privatise the state-run Korea Development Bank (KDB) by 2012, in line with President Lee Myung-Bak's plans to revitalise the economy.
The Financial Services Commission (FSC) said it would put the lender and its affiliates under a holding company and establish a policy financing agency by December.
It said the government would list the holding company on the local stock market next year and sell a 49 percent stake in the lender by 2012 to local and foreign investors.
FSC chairman Jun Kwang-Woo said the watchdog would turn KDB into a global player by allowing it to acquire other financial companies.
"In KDB's privatisation, we will keep the door open for mergers and acquisitions," he told reporters.
Min Yoo-Seung, head of Lehman Brothers Holdings's Seoul branch, was appointed Monday as KDB's new governor.
The bank (TBHS - news) , 100 percent owned by the government, was widely used to bail out troubled financial institutions and firms following the financial meltdown that hit South Korea and other Asian economies in 1997.
The privatisation of state-run banks including KDB and Woori Finance Holdings was a key part of Lee's economic reforms policy which is aimed at regenerating Asia's fourth largest economy.
Lee's government has vowed to push ahead with creating South Korean "mega-banks" to better compete in the global financial industry.
Jun said the government would privatise some of its 73 percent stake in Woori in the second half of this year.
The watchdog had studied plans to combine KDB, Woori and the Industrial Bank of Korea (024110.KS - news) into a holding company, but market watchers said creating a mega financial firm would delay the sale of state-owned lenders.
KDB will be allowed to sell new government-guaranteed bonds, it said, adding the government would guarantee payments of overseas debts worth about 21.1 billion dollars issued by KDB, the country's largest issuer of overseas bonds.
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