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WORLD> Asia-Pacific
S.Korea to buy bad loans from local banks
(Xinhua)
Updated: 2008-12-05 11:30
SEOUL -- South Korea's Finance Services Commission (FSC) said Friday that the state-run Korea Asset Management Corp. (KAMCO) will buy bad loans from local banks and other financial companies amid worsening economic slump.

According to the FSC, the KAMCO will purchase 1.3 trillion won ($876 million ) worth of loans extended by savings banks to finance real estate projects that are highly likely to turn sour.

Loans extended by banks and other financial firms to fund construction projects are deteriorating as builders are being hit by the sluggish property market.

The FSC said a total of 78.9 trillion won ($53.2 billion ) in loans were extended to finance real estate projects as of end-June, with banks offering 47.9 trillion won ($32.3 billion ) of the total amount.