UPDATE 1-Kookmin Bank mulls share buyback, no decision yet

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SEOUL, July 10 (Reuters) - Kookmin Bank 060000.KS is studying various measures to defend its stock price, including a share buyback, a Kookmin official said on Thursday, confirming market talk that has driven the stock out of a more than three-month trough.

The possible move may be taken before the largest retail bank in South Korea is transformed into a holding company structure later this year.

Investors turned cautious about the plan after its share price fell below the level at which Kookmin had agreed to buy back shares from shareholders opposing the holding firm format.

"We are considering various options, but no specific decisions have been made yet," the Kookmin official said by telephone, asking not to be named before a public announcement.

Rumours were that the bank was preparing measures, which include a block sale of its shares that it owns, to a strategic or financial investor, or a share buyback from the market.

The Korea Exchange called on Kookmin to verify the rumours by 0900 GMT.

The stock, the country's fifth-largest stock with a market value of 20 trillion won, extended gains for the second straight session, up 3.7 percent to 58,200 won by 0331 GMT, bucking the wider market which was down 0.1 percent.

But the current stock price is still below 63,293 won per share at which the bank plans to buy back shares from shareholders who oppose a share swap between Kookmin shares and a holding company. It is also down 20 percent from its 2008 high of 72,600 won hit in early May.

It tumbled 8.6 percent on Tuesday to its lowest since March 21, in line with sliding local and global stocks amid runaway oil and raw material prices.

Merrill Lynch analyst Bryan Song said in a note on Wednesday that Kookmin could lower the put back option price by tracking the KOSPI's movements.

Kookmin is expected to post second-quarter earnings on July 28, and its CEO, Kang Chung-won, may provide details on plans to support its share price.

The South Korean bank has rarely bought its shares since it repurchased shares from the government in late 2003 at 43,424 won per share to become fully privatised.

(Reporting by Kim Yeon-hee; Editing by Ken Wills)