Seoul fund managers protest SK, credit card fallout

Old habits die hard: fund houses in Korea cry foul over credit card company bailouts.

Foreign fund managers say the South Korean government has resorted to old-style arm-twisting tactics to make them bail out credit card companies, in a replay of tactics that regulators had supposedly moved beyond.

Credit card companies sprang up in 2001 and 2002 as the vanguard of Korea's consumer-led growth, but the government slammed the brakes when household lending surged last year by 30%, with half of that in the form of cash withdrawals. The predictable result a surge in non-performing loans, with W8 trillion of delinquent payments as of January 30, a 23% rise from the previous month.

Exploding non-performing loans crippled the companies' ability to meet their enormous debts or...

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