Financial authorities Friday began the process of selling six savings banks suspended from business since mid-September due to poor financial health, in the hope of finding buyers by the end of December.
State-run Korea Deposit Insurance Corp. made a public notice for the sale of the debt-saddled banks, according to the Financial Services Commission, which halted their operation.
Potential bidders are required to submit a letter of intent between Oct. 20 and Oct. 21, an FSC official said.
The savings banks are Tomato, Jeil, Ace, Daeyeong, Prime and Parangsae. The KDIC is considering finalizing the sale of them by the end of the year.
After choosing preferred bidders in November, the agency is seeking to finalize the respective deals around mid-December.
While large-sized Tomato and Jeil will be sold separately, the remaining mid-sized banks will likely be auctioned off as a package deal ― Daeyeong plus Ace, and Prime plus Parangsae.
For a speedy sale process, the deposit insurance corp. decided to raise the minimum eligibility for bidders. A potential bidder should meet the requirement for company assets of 2 trillion won ($1.69 billion).
The six suspended savings banks have failed to raise their capital adequacy ratios above 1 percent, according to the FSC.
Their capital adequacy ratio ranged between minus 51.1 percent and minus 0.63 percent.
The FSC has reportedly been promoting participation from major financial groups in the coming mergers and acquisitions for the secondary banking sector.
Sixteen savings banks have been suspended by the FSC so far this year.
Speculation is growing in the market that more savings banks could be subject to suspension in the coming months as policymakers appear poised to raise the target for state funds to be injected to restructure the ailing secondary banking sector.
By Kim Yon-se (
kys@heraldcorp.com)
