An official at the Financial Services Commission confirmed that banks had been asked to prepare liquidity through repurchase-agreement facilities to aid MG Community Credit Cooperatives, but did not comment on the amount.
Depositors were lining up last week to withdraw funds from a branch of MG Community Credit Cooperatives after local media reported a rise in non-performing loans tied to real estate projects.
Woori Bank, Hana Bank, Shinhan Bank, KB Kookmin Bank and NongHyup Bank had been asked to make financing available to MG Community Credit, although the actual amount extended to the credit union would depend on deposit withdrawals, the sources said.
The sources added that each of the banks was asked to prepare 1 trillion won of financing, or 5 trillion won in total ($3.84 billion), as potential support.
MG Community and the five banks did not immediately respond to requests for comment.
Persons:
Kim Jin, 1,302.7800, Seunggyu Lim, Jihoon Lee, Ed Davies, Edmund Klamann
Organizations:
Financial Services Commission, Community Credit Cooperatives, MG Community Credit Cooperatives, Woori Bank, Hana Bank, Shinhan Bank, KB Kookmin Bank, NongHyup Bank, MG Community Credit, MG Community, Community, Interior Ministry, Bank of, Ministry of Finance, Citi, Jungdo, Thomson
Locations:
SEOUL, Namyangju, Seoul, Bank of Korea, Gangwon