Citigroup provides $800 million capital to Korean subsidiary

Tue. December 30, 2008; Posted: 07:26 AM

Dec 30, 2008 (Datamonitor via COMTEX) -- CBKKY | Quote | Chart | News | PowerRating -- Citibank Korea has announced that Citigroup has provided $800 million to raise the bank's capital.

Citibank Korea said that the purpose of the capital increase is to further differentiate the bank's strong capital position by issuing common stocks, particularly in an environment where local banks are finding difficulty raising capital through stock issuance. The bank said that this could contribute to the stabilization of the foreign currency market as the capital will be in US dollars denomination.

Of the capital, 60% injection will be in tier one common stocks while the remaining 40% will be in subordinated debentures, both to be acquired by Citigroup.

YK Ha, CEO of Citibank Korea, said: "Our tier one ratio was much higher than other banks even before the recapitalization. Citigroup's investment this time will further strengthen our capital position, making us the strongest bank in terms of capital base. With sound assets portfolio and a strong capital position, we will pursue better customer satisfaction, reinforcing our credit creation capacity."

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