South Korea's largest credit-card issuer, LG Card Co, said customers could withdraw cash again later yesterday after creditors agreed to extend emergency loans, averting a liquidity crunch that threatened South Korea's financial system. \nLG Card was forced to suspend cash advances over the weekend because of its liquidity crunch, raising the specter of a spiralling series of defaults as many South Koreans use their credit cards to pay bills and service other credit card debts. \nLG Card has 14 million customers, almost a third of South Korea's population. \n"We will be able to resume cash-advance services in the afternoon," said a spokesman for LG Card. \nWoori Bank and other lenders agreed late on Sunday to provide 2 trillion won (US$1.68 billion) of fresh loans and to roll over LG's outstanding debt for one year, helping avert its insolvency. \nBut they warned they could write down LG family stakes in LG Card and sell other collateral if the LG Group parent failed to turn around the card firm. \nThey also said a debt-to-equity swap and a sale of LG Card to strategic investors was possible if trouble persisted. \nAnalysts said the loans had not resolved LG Card's problems. \n"We think this liquidity support package may only be able to stabilize rather than resolve LG Card's liquidity situation," said Philippa Rogers, an analyst at Goldman Sachs. "We think LG Card needs to find a strategic investor." \n"Despite the emergency financial aid, the company is at a very critical point," said Park Seok-hyun, an analyst at Kyobo Securities. \nThe card industry is struggling to cope with the aftermath of a credit boom that has left consumers unable to repay loans and card issuers with piles of bad debt. \n"This is a necessary step to not only prevent any bigger turmoil in [the] financial system, but also help out the stabilization of credit-card issuers given a significant squeeze in credit markets for credit cards seen over the recent months," said Yun Seok, analyst at Credit Suisse First Boston. \nCredit card firms' problems came to a head in March after an accounting scandal at a conglomerate scared investors off lower-quality securities, making it difficult for card issuers to roll over bonds issued to finance their lending. \nSouth Korean adults carry more than three credit cards each on average, encouraged by government tax breaks aimed at reviving domestic spending and ensuring transparent tax collection. \nLG Card had faced a default on its debts because its lenders and its parent LG Group, South Korea's second-largest conglomerate, disagreed over collateral the group had originally offered in return for the bailout. \nAlready, one won in every nine owed on a credit card was at least one month overdue at the end of August. Overdue loans at eight credit-card firms stood at 8.6 trillion won (US$7.20 billion) at the end of August, 11 percent of total credit card loans. \n"I was startled to find I could not use my LG Card to withdraw cash to buy a present for a friend," Jang Eun-ju, a teacher living in a posh neighborhood in southern Seoul. "I won't be carrying that card any more."
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Three to four tropical storms or typhoons are expected to hit Taiwan this year due to a weak La Nina effect in the northwest Pacific Ocean, the Central Weather Bureau (CWB) said yesterday, as typhoon season begins next month. Taiwan’s typhoon season generally lasts from July to September, with most typhoons occurring in August. Weather Forecast Center Director Lu Kuo-chen (呂國臣) told a news conference that a weakening La Nina is expected to have less of an effect on Taiwan. “The climate simulation we conducted, and those conducted by other meteorological agencies around the world, showed that the number of typhoons that