Korea Development Bank (KDB) has refused to rule out bidding for Lehman Brothers, the Wall Street investment house, but has hinted that any approach would not be imminent.

In an interview over the weekend, KDB sought to play down an earlier statement in which it had said that it was open to an approach on the bank.

It said: “We are just at an early stage of privatisation, and we are weak at investment banking by international standards. In the long term, we should strengthen that weakness.”

Lehman Brothers is under intense scrutiny on Wall Street and remains the most exposed of the big banks to troubled fixed-income assets and to American commercial and residential property.

The bank, which is headed by Richard Fuld, one of the longest-serving bosses on Wall Street with 15 years at the top, is expected to reveal a $2 billion (£1.08 billion) net loss when it reports its third-quarter figures in the middle of September. It is also expected to write off another $3 billion of assets in an attempt to sort out its balance sheet.

It is understood that Mr Fuld has already drawn up plans to try to sell a stake in the bank's lucrative fund management unit, which includes Neuberger Berman, and had preliminary talks with the South Korean bank last week. At the time, the Koreans walked away over price, prompting one banking analyst to tell his clients that Lehman Brothers was ripe for a hostile takeover.

All the Wall Street banks are suffering from the slide in M&A activity, weak equity markets and near-frozen fixed-income markets. Lehman Brothers, with more than $75 billion of leveraged loans, commercial property investments and other suspect assets, is regarded as one of the weakest.

It reported to have funding lines in place for more than a year ahead and to have plenty of liquid assets, but analysts believe, nevertheless, that it may feel obliged to go back to its shareholders for fresh equity. It has already raised $11.9 billion in the past six months.

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