S. Korea: KDB confirms talks with Lehman, Korea bank shares fall

Reuters ^ | 09/02/08 | Kim Yeon-hee

[TigerLikesRooster]

KDB confirms talks with Lehman, Korea bank shares fall

By Kim Yeon-hee Tue Sep 2, 2:26 AM ET

State-owned Korea Development Bank (KDB) confirmed on Tuesday it was in talks with Lehman Brothers over a possible joint investment in the U.S. bank with other Korean banks, sending local banking shares lower.

Lehman, which has more than $60 billion of mortgage and mortgage security exposure, is under pressure to raise capital ahead of its results announcement this month as Wall Street firms continue to reel from the credit crunch.

"Our CEO said talks are ongoing and cannot disclose the content of them," KDB spokesman Sung Joo-young said.

Buying a top bank could catapult South Korea's financial services firms into the top ranks of global investment houses, which have been battered by heavy mortgage writedowns, and which have seen their share prices tumble.

But investors are jittery about a potential Lehman tie-up, which may involve top South Korean banks such as Shinhan Financial Group, Woori Finance Holdings and Hana Financial Group , on concerns about the extent of problems at the U.S. bank.

[TigerLikesRooster]

Ping!