Published : 2013-02-15 21:21
Updated : 2013-02-15 21:21
Two more savings banks were added to the list of entities whose operations were suspended.
The Financial Services Commission on Friday said it has decided to halt the operations of Seoul and Youngnam banks.
However, the repercussions of the move are not expected to be severe, since following the move, the contracts from these two banks will be moved to two other banks, respectively, and will be operating under different names ―Yejoo and Yesol ― starting next week.
These two banks were established under a government policy to shoulder and launder the bad debts of second tier savings banks, and the Korea Deposit Insurance Corp. is the single majority shareholder in both entities.
Seoul Savings Bank is an affiliate of the embattled Woongjin Group, which recorded a BIS ratio of -5.55 percent as of the end of September last year.
Youngnam had been under the management of the state-run insurance corporation since its parent company was eliminated from the market. Youngnam’s capital erosion rate had reached almost 95 percent, indicating it was worth almost nothing at the point of the FSC suspension.