KDIC sells stake in Shinhan Financial

SEOUL, July 8 (Yonhap) -- South Korea's state-run deposit insurer said Friday it disposed of its remaining stake in Shinhan Financial Group Co., completing the sale of its interest in the country's No. 3 banking group The Korea Deposit Insurance Corp. (KDIC) said it sold the 0.61 percent stake for 148.6 billion won through a block sale before the stock market's opening. It was sold at a 1.9 percent discount from Thursday's closing price of 52,000 won. The KDIC injected 2.7 trillion won to salvage now-defunct Choheung Bank in the aftermath of the 1997-98 Asian financial crisis. In 2003, KDIC sold its 80 percent stake in Choheung to Shinhan Financial, receiving 51 percent of the payment in cash and 49 percent in the latter's shares. Since then the state deposit insurer had been reducing its stake in Shinhan Financial via block sales. The KDIC said it has registered 4.7 trillion won in proceeds from the sale of Choheung Bank to Shinhan Financial, much larger than the amount of injected public money. The South Korean government injected massive amounts of public funds into local financial institutions to bail them out when the financial crisis erupted in late 2007. As of the end of May, the country had retrieved 60.2 percent of the injected public funds, according to the Financial Services Commission.