Bad bank to buy 1 tln won of soured property loans in June

SEOUL, May 25 (Yonhap) -- An envisioned debt clearer will initially purchase 1 trillion won (US$910 million) of soured property loans from local banks in June, the financial regulator said Wednesday.
Seven banks including top lender Kookmin Bank are moving to establish the bad bank with 1.2 trillion won in capital as part of efforts to take bad project finance loans to builders off their books.
"Currently, the bank sector's total nonperforming PF loans reach 6.8 trillion won," Jeong Eun-bo, a senior official at the Financial Services Commission (FSC), said in a news briefing. "The bad bank will initially pick up 1 trillion won of them in June."
Jeong said the debt clearer will buy up to 2.5 trillion won of soured real estate loans by the first half of 2012.
The target amount is based on an assessment that about 700 billion won in property loans may turn sour every quarter, the official said.
The financial watchdog said it is accelerating efforts to complete the planned purchase of 1 trillion won in bad debts during next month.
As of end-March, 18.35 percent of 18 local banks' total project finance loans were classified as nonperforming, up from 16.44 percent three months earlier and 3.41 percent a year earlier.
The participating banks with large outstanding property loans will pool the capital for the bad bank, along with UAMCO Ltd., a bad asset buyer launched in 2009 by the banking sector.
pbr@yna.co.kr