UPDATE 3-KDB confirms Lehman talks; Korea bank shares fall

martes 2 de septiembre de 2008 10:53 CEST

(Updates share prices, adds quotes from a report)

By Kim Yeon-hee

SEOUL, Sept 2 (Reuters) - State-owned Korea Development Bank (KDB) confirmed on Tuesday it was in talks with Lehman Brothers LEH.N 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," said KDB spokesman Sung Joo-young.

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 (055550.KS: Cotización), Woori Finance Holdings 053000.KS and Hana Financial Group (086790.KS: Cotización), on concerns about the extent of problems at the U.S. bank.

Shares at Woori, the country's No.3 financial services firm, tumbled 6.3 percent to their lowest in almost three years. Second-ranked Shinhan trimmed falls to close down 1 percent and No.4 Hana shares shed 2.6 percent, underperforming a 0.5 percent fall on the wider market .KS11.

KDB CEO Min Euoo-sung, who headed Lehman's local operations until earlier this year, also said his bank was in discussions to form a consortium with private banks to jointly buy Lehman, but pricing remained an issue, according to his spokesman.   Continuación...