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SKorea to invest $1.24 bil. in state-run banks
(Xinhua)
Updated: 2008-12-16 22:47

SEOUL -- The South Korean government Tuesday announced its plan to invest 1.65 trillion won (1.24 billion US dollars) in three state-run banks to improve their capital adequacy ratio.

South Korea's President Lee Myung-bak (L) talks with Prime Minister Han Seung-soo before an economic ministers' meeting at the presidential Blue House in Seoul December 14, 2008. The South Korean government Tuesday announced its plan to invest 1.65 trillion won (1.24 billion US dollars) in three state-run banks to improve their capital adequacy ratio. [Agencies]

According to the Ministry of Strategy and Finance, Korea Development Bank (KDB) and Industrial Bank of Korea (IBK) will receive 500 billion won (375.76 million US dollars) each, while 650 billion won (488.49 million US dollars) to be invested into Export-Import Bank of Korea (Korea Eximbank).

The ministry said improvement in capital adequacy facilitate these banks to lend more money to small- and medium-size enterprises (SMEs) and support exporters who are having difficulty to get funds amid the a general downturn in the global economy.  

The capital adequacy ratio, which measures the percentage of a bank's capital to its risk-weighted credit, is the key barometer of bank's financial soundness.