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TRADE FINANCE | Cesar Tordesillas, Korea
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Woori Bank to sue Citi, BoA, RBS over losses

Woori Bank plans to sue 3 foreign banks in a New York federal court due to improper sale of risky derivatives that caused it to incur heavy losses.

 

The Korean bank suffered heavy losses worth 1.62 trillion won or US$1.43 billion after the U.S. subprime crisis made sour its 2005-2007 investment in U.S. collateralized debt obligations and credit default swaps.

A spokesman at Woori Bank said Citigroup, BoA-Merrill Lynch and Royal Bank of Scotland wsold such risky investment vehicles to Woori Bank without properly giving information about entailing risks.

The potential legal action, reviewed by the board last month, would be related to the bank's losses worth US$200 million to $300 million, he added.

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