More funds 'going to Korean bank'
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South Korea has spent billions of dollars to help ailing banks since the 1997-98 Asian financial crisis.
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SEOUL, South Korea (Reuters) -- South Korea will inject 800 billion won ($640 million) into Korea First Bank this year, under a deal to cover losses after the bank's sale to U.S. fund Newbridge Capital, the Chosun Ilbo newspaper said on Tuesday.
The funds to be provided by the Korea Deposit Insurance Corp, a state-run restructuring agency, will be on top of 17.1 trillion won ($13.6 billion) of taxpayers' money injected so far into Korea First Bank, the newspaper said, citing an official at the state-run agency.
But a Korea Deposit Insurance Corp official, who is responsible for Korea First Bank, told Reuters the exact size of the additional funds had not yet been decided.
"It will be injected this year and will be the last one, but it is difficult to be specific about the amount and date at this stage," said the official, who declined to be named.
In late 1999, the government sold a majority stake in the nationalized bank to Newbridge Capital, as part of pledges agreed with the International Monetary Fund in return for a $58 billion bailout of South Korea.
Under the deal, the government agreed to provide compensation for losses incurred at Korea First Bank after the sale until the end of 2002.
South Korea has spent a total of 159.6 trillion won ($127 billion) in public funds to help rehabilitate ailing financial institutions since the 1997-98 Asian financial crisis.
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