Daishin Securities picked as preferred bidder for ailing savings banks

SEOUL (Yonhap) - South Korea's state-run deposit insurance agency said Monday it picked Daishin Securities Co. as a preferred bidder for three ailing savings banks to be sold in a package.
The state-run Korea Deposit Insurance Corp. (KDIC) said it named the mid-sized brokerage house as the prime bidder for the three savings banks -- Jungang Busan Savings Bank, Busan II Savings Bank and Domin Mutual Savings & Finance Co. Its rival Kiwoom Securities Co. was picked as a backup bidder, it added.
The government is seeking to sell seven troubled savings banks, including top player Busan Savings Bank, whose operations have been suspended since January due to their deteriorated asset quality and capital strength.
On Friday, five financial institutions in South Korea including top banking group KB Financial Group Inc. offered bids to buy the package that includes Jungang Busan Savings Bank.
The KDIC said it picked Daishin Securities as the preferred bidder by taking into account offered takeover prices and the amount of the deposit insurance funds that each hopeful bidder has tapped.
South Korea is pushing to sell the seven ailing savings banks in three packages in an effort to overhaul the teetering sector, which was hit by a pileup in soured construction loans. If package deals fall through, the KDIC will sell them separately.