Headlines

Korea Asset Management Corp. (KAMCO), the state-run debt clearer, is close to determining salvageable loans from its massive pile of distressed real-estate assets it has acquired from secondary banks in past years, company chairman Chang Young-chul said here Wednesday, The Korea Times reported. The toxic assets will be sent back to the lenders, which could further contaminate their financial health. Between 2008 and 2010, KAMCO had bought a combined 6.2 trillion won (about $5.8 billion) worth of construction project loans from savings banks.

The National Asset Management Agency made a loss of €714.1 million in its first 10 months of operation, according to unaudited accounts lodged with Minister for Finance Michael Noonan yesterday, the Irish Times reported. Nama was pushed into the red in the period from February 27th to December 31st, 2010, after booking an “estimated” impairment charge of €1 billion relating to the €71.4 billion nominal value of loans that it had received up to that point. Nama’s audited accounts will not be released until June and it is understood this impairment charge could yet increase.

Germany's WestLB is being given another deadline, until the end of June, to submit details of a restructuring plan to the European Commission, three persons close to the matter told Dow Jones Wednesday. The German government was informed by the Commission of the new deadline in writing over the weekend, they said. In mid-April WestLB owners and the German government delivered a plan to turn WestLB into a bank providing central banking services to savings banks in the region, known as a Verbundbank.

The U.K.'s financial regulator is pressuring some European financial institutions to restructure their London operations in ways that would subject them to greater oversight by the regulator, according to people familiar with the matter, The Wall Street Journal reported. The Financial Services Authority's goal is to prevent certain companies from exploiting European rules to set up banking and brokerage operations that the agency views as potentially risky because they use a structure that doesn't face tough local supervision. But the move by the FSA is controversial.

One day after agreeing to a $115.5 billion rescue package, Portugal was forced to offer higher interest rates on its debt, spurring fears that, as in Greece and Ireland after their aid deals, financing costs in the country will continue to escalate, the International Herald Tribune reported. While all three countries will benefit in the short term from the loans coming from the European Union and the International Monetary Fund, their ability to continue to raise affordable short-term funds from international investors is considered crucial.

New statistics released by InsolvencyJournal.ie reveal that April evidenced no respite in the number of corporate insolvencies, with 162 appointments recorded during the month. The total number of corporate insolvencies for the first four months was 558, an increase on the same period last year of 3%. April saw a marked increase in both Creditor’s Voluntary Liquidations (21% increase on March) and Receivership appointments (55% increase on March), a trend which is expected to continue.

Troubled property investment company Irongate has asked trustee Perpetual to call in the receivers after failing to secure a deal to raise the $50 million it needs to pay out retail bondholders this month, BusinessDay.co.nz reported. Formerly called St Laurence Property & Finance, Irongate has been selling properties and seeking an equity injection to remedy a continuing breach of its two trust deed ratios and enable it to meet the listed bonds repayment.

The Bundesbank’s new hawkish president Jens Weidmann said private investors should help cover costs of the euro zone crisis, the Irish Times reported. Mr Weidmann promised a continued “stability culture” at the German central bank after taking over yesterday from outgoing president Axel Weber. “To put the currency union back on a solid footing, the rules have to be formulated so that national finance (players) and private investors are, in principle, prepared to answer for the consequences of their decision,” said Dr Weidmann, an economist and former student of Prof Weber.

Lloyds Banking Group PLC Tuesday said it has put a package of distressed commercial real-estate loans on the market, stepping up its asset-disposal program to boost its balance sheet in line with other U.K. banks, Dow Jones Daily Bankruptcy Review reported. The portfolio, code-named Flagstaff, comprises some 38 assets including office, retail, leisure and industrial space, all of which were in receivership. It is the first time a package of individual assets in receivership has been aggregated.

The US Justice Department sued German giant Deutsche Bank Tuesday for more than $1 billion for mortgage fraud, saying the bank illegally obtained government insurance for substandard mortgages during the US housing boom, Agence France-Presse reported. Deutsche Bank and its subsidiary MortgageIT "repeatedly lied to be included in a government program to select mortgages for insurance by the government," the Justice Department complaint said.