Korea Asset Management Corp (Kamco), the state-run agency, said on Thursday that it is in talks with Merrill Lynch to buy a “substantial” amount of non-performing loans of the embattled US investment bank.

Kamco plans to spend about Won1,000bn ($886m) on US non-performing loans, including its possible purchase of Merrill’s non-performing loans, but the talks have stalled amid disagreements over pricing, the Korean agency said.