At a meeting held at 5 p.m. on February 2nd, 1999 to deliberate matters concerning Chungbuk Bank, the Financial Supervisory Commission (FSC) imposed a non-viable financial institution designation as well as a management improvement measure order on the subject bank. Chungbuk Bank is a regional bank with total assets of 2.6 trillion won (as of Dec., 1998) and was conditionally approved by the FSC on June 29, 1998.
The management improvement measure order entails a merger order with another financial institution (as defined under the General Banking Act) to take effect on February 8, 1999. The bank has up to April 30, 1999 to complete the merger process (including a merger consent at a shareholder meeting)
Following are the findings that led to the above decision ;
- According to a due diligence conducted by the Financial Supervisory Service (FSS) utilizing data as of Dec., 1998, Chungbuk Bank showed a deficiency in net worth of 61 billion won

- During 1998, Chungbuk Bank suffered from large operational losses, decrease in deposits and increase in NPLs, leading to erosion of capital and difficulties in satisfying single borrower limits as well as other statutory requirements

- Considering among others the decrease in total loans of recent, Chungbuk Bank is deemed to not have been fully carrying out conventional banking functions

* Please refer to the attached file for details.