HONG KONG - Korea Development Bank (KDB) confirmed yesterday it was in talks about a possible investment in Lehman Brothers, the beleaguered US investment bank under pressure to raise more capital before it reports earnings later this month.

"Our CEO confirmed talks are going on," KDB said. But the state-run bank declined to give further details. Min Euoo-sung, KDB's new chairman and a former head of Lehman in Korea, has said the lender would actively seek overseas takeovers, adding the fallout from the US subprime crisis was an opportunity for KDB.

The latest talks come as Dick Fuld, Lehman's chief executive, faces growing pressure before the bank's mid-September earnings report, which analysts say could include $4 billion (€2.76 billion) of more writedowns. Lehman is considering options to raise capital, including a sale of a stake in the company itself or the sale of all or part of its asset management arm.

KDB officials flew to New York last month to discuss buying up to 50 per cent of Lehman, people familiar with the talks said. But those talks stalled after KDB concluded Lehman was asking too much.- (Financial Times)