A 'Bad Bank' to Handle Bad Debt

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A 'Bad Bank' to Handle Bad Debt

The government's new financial holding company plans to set up a "bad bank" to manage the bad debts of its subsidiaries, it said Sunday. Woori Finance Holdings Co. also plans to recruit staff from the subsidiaries to form an operational team to isolate the bad debts.

"To reorganize the functions of the subsidiaries," a company official said, "Woori will separate and then combine their bad debts to increase efficiencies and speed."

The team is expected to set aside then produce ways to dispose of a total of 9 trillion won ($6.9 billion) of bad debt. The bad bank will be established within this year, Woori said, assuming no regulatory roadblocks.
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