Increase of 18.4% from Previous Year
Rapid Debt Adjustment Surged 605% in 4 Years
Record High Corporate Bankruptcies, ‘[Edaily reporter Kim Guk-bae] With rising interest rates and a slowing economy, more citizens and small business owners are unable to repay their debts on time. This has led to the financial public institutions’ subrogated payment amount exceeding 17 trillion won this year, the highest recorded so far.’,
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, ‘According to materials obtained by Oh Ki-hyung, a member of the Democratic Party, from 13 public institutions including the Housing and Urban Guarantee Corporation (HUG) and the Credit Guarantee Fund, last year’s total subrogated payment reached 16.3142 trillion won. This represents an 18.4% increase compared to the previous year’s combined total of 13.7742 trillion won. The figure for SGI Seoul Guarantee Insurance (1.1133 trillion won) only reflects the first half of the year, suggesting that the subrogated payment for this year likely exceeds 17 trillion won when the second half of the year is included.’,
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, ‘By institution, HUG recorded the highest subrogated payment. Its payment last year was 6.094 trillion won, a 23.8% increase from the previous year’s 4.9229 trillion won. This rise was attributed to the recession in the real estate market, leading to more incidents of rental deposit refund guarantees. The Credit Guarantee Fund, which guarantees loans for small business owners, saw its subrogated payment increase from 2.2873 trillion won in 2023 to 2.9584 trillion won last year, and the Regional Credit Guarantee Foundation’s payment also surged by 40.2%, from 1.7126 trillion won to 2.4005 trillion won in the same period. The Korea Housing Finance Corporation (9117 billion won) and the Technology Credit Guarantee Fund (1.1679 trillion won) also experienced significant increases in subrogated payments.’,
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, ‘While public institution losses are growing, banks that sell policy products are hitting record profits. The combined net profit of the four major financial groups last year was 16.4205 trillion won, the highest ever. Interest income also grew 3.1%, reaching 41.876 trillion won compared to the previous year’s 40.6212 trillion won.’,
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, ‘Indicators related to the debt burden of citizens and small business owners are reaching their highest levels. Notably, the number of short-term delinquents or those at risk of delinquency, who previously repaid debts diligently but faced repayment challenges due to delayed economic recovery, has surged. According to the Financial Services Commission, the total number of debt adjustment applicants last year was 195,432, a 5.6% increase from the previous year’s 185,432. This marks a 51.8% increase compared to the end of the first pandemic year, 2020, when there were 128,754 applicants.’,
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, ‘Applications for “rapid debt adjustment,” which allows a deferment or extension of repayment period for those who are currently repaying their debts but are at risk of or in short-term delinquency under one month, have also increased. As of the end of last year, there were 50,527 applicants for rapid debt adjustment, a 605.1% increase from 2020’s year-end figure of 7,166. Corporate bankruptcies are also at an all-time high. According to the monthly court statistics report, 1,940 corporate bankruptcy cases were filed in courts nationwide last year, surpassing the previous record of 1,657 cases set the year before. To support vulnerable groups experiencing capital shortages, the Financial Services Commission plans to supply policy citizen finance worth 11.8 trillion won, which is 1 trillion won more than originally planned.’,
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, ‘Representative Oh stated, “I have been warning about the sharp increase in subrogated payments from guarantee institutions since 2023, but the government has only recently begun to announce countermeasures. Banks, which are enjoying tens of trillions in interest profits, should assume greater risk.”’