Government to Inject '2 Trillion' in Kind Capital into Korea Development Bank This Month

BIS Ratio at 14%, Soundness and Loan Capacity Increase↑

On the 10th, a creditors' meeting of Taeyoung Construction was held at the headquarters of the Korea Development Bank in Yeouido, Seoul. Photo by Younghan Heo younghan@

The government will inject 2 trillion won into the Korea Development Bank to enhance its financial soundness.

According to financial authorities on the 17th, the Ministry of Economy and Finance and the Financial Services Commission have decided to support the Korea Development Bank with 2 trillion won by contributing shares of public enterprises such as Korea Land and Housing Corporation (LH) in kind. This is the largest scale since 2015.

Once the government's contribution is completed within this month, the Korea Development Bank's Basel International Settlement Bank (BIS) capital adequacy ratio is expected to rise from 13.66% as of the third quarter of last year to over 14%. The BIS ratio recommended by financial authorities for banks is 13%.

With this contribution, the Korea Development Bank is expected to improve not only its soundness but also its lending capacity. Earlier, the Financial Services Commission set the funding supply target for this year at 212 trillion won for policy financial institutions including the Korea Development Bank, Industrial Bank of Korea, and Korea Credit Guarantee Fund.