2023-12-25 03:29:21
A view of an apartment complex in downtown Seoul. (Photo = Yonhap News)
The real estate project financing (PF) insolvency rate of local and small and medium-sized savings banks was found to have increased five-fold in one and a half years. Financial authorities plan to strengthen credit regulations for savings banks, including treating new land-secured loans in the same way as real estate PF loans.
According to Korea Credit Rating’s ‘Inspection of Blind Spots in the Savings Bank Industry’ report on the 25th, the real estate PF NPL ratio of 47 savings banks (hereinafter referred to as savings banks subject to analysis) that do not have a credit rating from a credit rating agency is at the end of 2021. It rose approximately five-fold from 1.3% to 6.5% at the end of June this year. Of the 47 companies, 43 have assets of less than 1 trillion won, and 29 of them are small companies with assets of less than 500 billion won.
The ratio of real estate PF to equity capital of the savings banks analyzed was 67.9%, the proportion of construction industry loans to equity capital was 50.4%, and the combined ratio of real estate PF and construction industry to equity capital was 118.3%, showing a high quantitative burden due to the deterioration of the real estate economy.
The gap in real estate PF burden is not large compared to that of savings banks with ratings, but the proportion of construction industry/equity capital was about 17% points higher than the rating of 33.3%. Korea Investment & Securities said, “Considering that the average bridge loan:real estate PF ratio in the savings bank industry is approximately one-to-one, if we take into account the real estate industry, which is expected to include a significant portion of bridge loans, the actual impact of the deterioration of the real estate economy will be significantly higher than this.” “It was estimated.”
Financial authorities plan to apply regulations equivalent to real estate PF to new land-secured loans starting next year.
Reporter Kim Soo-hwan [email protected]
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