The regulators told lenders that they would mandate sales if they failed to improve their finances in the next 45 days. Last year, South Korea stopped 16 savings banks after a sluggish real estate market.
“With this, we’ve completed restructuring on the savings banks industry that started last year,” Kim Joo Hyun, the commission’s secretary general told reporters today. “In the future, such restructuring will be done through the market system.” The regulator said affiliates of the suspended saving banks will operate normally.
The combined assets at South Korean savings banks totaled 60.2 trillion won ($53 billion) as of December, down 31 percent from the end of 2010, according to Financial Supervisory Service data. Deposits at the banks dropped 28 percent to 55.7 trillion won as of February, from 76.8 trillion won at the end of 2010, according to Bank of Korea data.
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