KB Financial Group mulling share sale to bolster capital base

By Kim Soo-yeon
SEOUL, June 3 (Yonhap) -- KB Financial Group Inc., South Korea's No. 3 financial
services company, said Wednesday it is considering selling shares as part of
efforts to boost its capital amid the slowing economy.
"We are mulling various options including share offerings in a bid to bolster the
capital base," Choi In-seok, an official at the group said. "But details like the
timing have not been decided yet."
Hit by the move, shares of KB Financial Group were trading at 40,900 won
(US$33.14) as of 9:34 a.m., down 4.88 percent on the main bourse.
The move comes as Korean banks are making efforts to beef up their capital
cushion because problem loans are increasing amid the slowing economy and a
corporate restructuring move.
As of the end of March, the group's capital adequacy ratio, a key gauge of
financial health, declined to 13.16 percent from 13.18 percent in the preceding
quarter.
Experts say a recent rally on the Korean stock markets may prompt more local
financial firms to sell shares in a bid to expand their lending capacity.
Late last year, local banks sold more subordinated bonds to raise their capital,
but the sale of such debt increased borrowing costs for lenders.
sooyeon@yna.co.kr
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