KAMCO clears nearly US$8.5 bln in troubled assets this year

SEOUL, Dec. 24 (Yonhap) -- Bad debt purchases by Korea Asset Management Corp.
(KAMCO) more than tripled to nearly 10 trillion won (US$8.5 billion) this year as
it scrambled to bolster bank and corporate balance sheets amid a global financial
crisis, the state-run debt clearer said Thursday.
KAMCO bought a total of 9.6 trillion won distressed debts, 3.4 times the amount
the debt buyer took over in 2008, the company said.
"In the aftermath of the global financial turmoil, KAMCO purchased a massive
amount of trouble loans to prop up liquidity for financial firms and help the
financially under-privileged recover creditworthiness," a KAMCO official said.
The state-run bad bank took over 4.5 trillion won of unsecured bonds from local
financial firms while picking up 3.8 trillion won of troubled project-financing
loans from banks and non-banking lenders.
South Korea set up a 20-trillion won public fund in May in a bid to help banks
recapitalize and support corporate debt rescheduling as the U.S.-triggered global
financial crunch resulted in a steep rise in bank default rates.
The delinquency rate at local banks stood at 1.19 percent as of the end of
October after hitting a nine-month low of 1.11 percent the previous month. The
ratio shot up to 1.67 percent at the end of February.
The economy posted growth for the third consecutive quarter in the third quarter,
accelerating 3.2 percent, the fastest expansion in over seven years, amid
reviving exports and upbeat private consumption.
pbr@yna.co.kr
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