Savings banks accelerate the resolution of real estate bad debts… Establishing a 1 trillion won fund and a specialized company.

Financial Services Commission Chairman: “Proceeding Without Hitches in Real Estate PF Cleanup and Restructuring”,

Yonhap News,
, ‘Financial authorities are creating a stabilization fund worth over 1 trillion won and founding a specialized company to manage the bad loans in the real estate project financing (PF) sector of the savings bank industry.’
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, “The Financial Services Commission announced on the morning of the 20th that it held a meeting with the Financial Supervisory Service, Korea Deposit Insurance Corporation, and the savings bank industry to discuss ‘Ways to Enhance the Role of Savings Banks’.”
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, ‘Authorities initially plan to strengthen risk management by establishing a specialized NPL (non-performing loan) management company for the savings bank sector. They intend to reorganize and operate a joint stabilization fund exceeding 1 trillion won to ensure the smooth progress of the cleanup and restructuring of non-performing real estate project financings.’
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, “Additionally, the criteria for mergers and acquisitions (M&A) for savings banks will be relaxed for the next two years. The BIS ratio threshold for potential M&A targets will be raised from ‘below 9%’ to ‘below 11%’. The borrowing limit for the Korea Federation of Savings Banks will be raised by 2 trillion won, from 3 trillion to 5 trillion won, to enhance market stabilization functions.”
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, ‘Chairman Kim Byung-hwan of the Financial Services Commission stated, “This is aimed at overcoming the difficulties faced by the savings bank sector and restoring the supply function of regional and public finance. The real estate PF cleanup and restructuring will proceed without fail, and we must secure sufficient loss absorption capacity through capital expansion.”‘
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