SEOUL May 20 South Korea's financial supervisor
said additional real estate project financing loans might go
sour due to the prolonged slump in the property market.
The Financial Supervisory Service (FSS) said in a statement
that 18 domestic banks held 6.7 trillion Korean won ($6.16
billion) in distressed real-estate project financing loans at
end-March, up from 6.4 trillion won at the end of December.
The amount of bad property loans grew as some builders had
filed for bankruptcy protection, according to FSS.
The regulator added that it would advise lenders to transfer
bad real estate project-financing loans to a new debt-clearing
bank that would be charged with buying up real estate project
financing loans worth up to 1 trillion won. .
Large commercial lenders promised to cooperate with the
government to prevent any financial risks stemming from
insolvent real estate project-financing loans.
($1 = 1088.500 Korean won)
(Reporting by Ju-min Park; Editing by Ken Wills)