South Korea’s state-owned Korea Deposit
Insurance Corporation has suspended Samwha Mutual Savings Bank’s
operations for six months after the bank failed to meet
regulatory capital requirement levels.
The suspension is part of the government’s
initiative to strengthen the country’s banking industry.
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The bank faces being put up for auction if it
fails to restore the required capital strength set out by the
Korean Financial Service Commission.
Samwha Mutual Savings Bank had bad debts of
KRW50.4bn ($45m) and lost KRW91.4bn in 2009 from non-performing
loans.
Korea’s savings banks continue to suffer
from toxic loan books following excessive financing in the real
estate market during the property boom pre-2008.
