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Korea Development Bank to help Korea Eximbank shore up capital base

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Korea Development Bank to help Korea Eximbank shore up capital base

KoreaDevelopment Bank will transfer part of its stake in Korea AerospaceIndustries, worth about 500 billion won, to Export-Import Bank of Korea, or Korea Eximbank, to shoreup its capital, The Korea Heraldreported May 10, citing Korea Development Bank CEO Lee Dong-geol.

Korea Development Bank, which owns a 26.75% stake in KAI,will transfer a 7.86% stake to Korea Eximbank, which has been facing a decline inits BIS adequacy ratio due to increasing exposure to debt-laden shipping andshipbuilding firms.

Korea Eximbank's current BIS adequacy ratio of 10% issignificantly lower than the 15% threshold, the publication reported. The bankreceived a capital injection of 1 trillion won from the South Korean governmentin 2015.

The news came after the Bank of Korea and the FinanceMinistry approvedproposals to increase the capital base of Korea Development Bank and Korea Eximbankas part of efforts to restructure the shipping and shipbuilding industries.

As of May 10, US$1 wasequivalent to 1,171.15 South Korean won.