Citigroup Inc donates $800 million to S.Korean bank

With the aim of supporting the financial base of its South Korean unit, Citigroup Inc has decided to inject $800 million into the branch, Citibank Korea said.

Moreover, it has been announced the first 60 percent of the amount to be used for issuing new shares has already been received, and another 40 percent to be spend on subordinated debt will be received before the end of the year.
City has announced that "With the capital injection, the bank's BIS capital ratio at Basel I is expected to exceed 13 percent from 10.8 percent and Tier 1 ratio is expected to exceed 11 percent from 9.74 percent," referring to the Bank For International Settlement (BIS) capital ratio.

South Korean banks have been raising their capitals since November, and are still urged to raise capital rations even higher, above the pledged levels, with the aim of lending more funds to companies. Most of them managed this by selling subordinated debt. The country's top four lenders, for example, jointly plan to raise 8 trillion won ($6.22 billion) by the end of this month, Reuters calculates.

YK Ha, CEO of Citibank Korea said, "Our Tier 1 ratio was much higher than other banks even before the recapitalization. Citigroup's investments this time will further strengthen our capital position, making us the strongest bank in terms of capital base."

Source: Reuters