Park Cha-hoon, Saemaeul Geumgo Central Association Chairman, "Achieving 200 Trillion Won in Assets by Mid-First Half of This Year"

2nd Anniversary of Inauguration: Written Interview
Confidence in Asset Soundness and Fund Management

Park Cha-hoon, President of the National Credit Union Federation of Korea

[Asia Economy Reporter Kim Min-young] Park Cha-hoon, Chairman of the National Credit Union Federation of Korea (NCUF), announced, "We will achieve assets of 200 trillion won within the first half of this year."

In a written interview held on the 23rd to mark his 2nd anniversary in office, Chairman Park stated, "Assets grew approximately 27% from about 150 trillion won at the end of 2017, before my inauguration, to 190 trillion won at the end of 2019, and the majority of credit unions are steadily generating appropriate net income."

Park, who assumed the 17th presidency of the Federation on March 15, 2018, expressed his reflections over the past two years and showed strong confidence in innovative finance aimed at the soundness, safety, and digitalization of Saemaeul Geumgo. He said, "To respond to changes in the financial environment, we will focus on discovering new growth engines so that Saemaeul Geumgo can establish itself as a representative indigenous financial institution of the Republic of Korea."

- How do you feel on your 2nd anniversary in office?

▲ Upon taking office as chairman, I emphasized the value of 'Credit Union First.' For Saemaeul Geumgo to be a trusted financial institution by its members and a respected financial organization by society, autonomous and responsible management of each credit union must be the foundation. To this end, from the start of my term, I have strengthened the Federation’s support functions. We have reduced various contributions paid by credit unions to the Federation and established various communication channels to directly hear the difficulties of credit unions, promptly reflecting these voices in management. In particular, we have enhanced the authority and roles of departments responsible for social contribution activities and digital finance to strengthen the system so that Saemaeul Geumgo can become a robust regional financial institution leading the 4th Industrial Revolution era.

- What are the major achievements since your inauguration as chairman?

▲ First, the assets and net income of Saemaeul Geumgo have grown significantly. Assets increased approximately 27% from about 150 trillion won at the end of 2017, before my inauguration, to 190 trillion won at the end of 2019, and most credit unions are steadily generating appropriate net income. I expect to achieve 200 trillion won in assets within the first half of this year.

Additionally, to prepare for the digitalization of finance, we held the 'Digital Finance Enhancement Proclamation Ceremony' in January last year and established the Digital Finance Headquarters through organizational restructuring. Furthermore, to fulfill Saemaeul Geumgo’s social responsibility, we elevated the status of departments related to social contribution, laying the foundation to leap forward as a smart financial cooperative suitable for the 4th Industrial Revolution era.

As a result of these efforts, in October last year, we issued overseas-compatible check cards, recording a notable achievement of 44,000 cards as of the end of last month.

- What is the financial soundness level of Saemaeul Geumgo?

▲ Saemaeul Geumgo not only consistently generates appropriate profits but also boasts excellent management indicators among mutual financial institutions, such as delinquency loan ratio and return on assets (ROA). As of the end of last year, retained earnings amounted to 6.3 trillion won, and capital stock was 7.9 trillion won, holding equity capital equivalent to about 8% of total assets, indicating very stable financial operations.

Moreover, the National Credit Union Federation of Korea has dedicated departments for risk management and internal control, actively responding to rapidly changing market environments through continuous monitoring, management, and supervision.

- What is the status of loan operations?

▲ As of the end of last year, 74% of Saemaeul Geumgo’s total deposits and savings are operated as loan receivables, with 96% secured loans such as real estate and 4% unsecured loans, indicating stable management. The most important indicator of loan soundness, the delinquency loan ratio, stood at 1.85% at the end of last year, a very favorable level compared to other mutual financial institutions.

Since 2008, in response to government policies, we have handled policy fund loans such as the Sunshine Loan, with amounts reaching 4.9217 trillion won, playing a significant role in supporting finance for low-income households.

- What is the safety status of Saemaeul Geumgo, including the depositor protection system?

▲ Since 1983, Saemaeul Geumgo has protected customers’ valuable assets by introducing the depositor protection system earlier than banks under the Saemaeul Geumgo Act. If Saemaeul Geumgo is unable to pay customers’ deposits and savings, the depositor protection reserve fund established under the Saemaeul Geumgo Act pays depositors up to 50 million won per person (including principal and interest), the same as banks. Currently, the depositor protection reserve fund accumulated in Saemaeul Geumgo alone amounts to 1.72 trillion won.

There is also a legal basis to borrow from the government if necessary, and we hold a repayment reserve of 8.5 trillion won to secure liquidity and prepare for deposit withdrawals, so depositors can rest assured that they can withdraw their deposits anytime they wish under any circumstances.

- What is the status of social contribution and international cooperation development projects?

▲ The National Credit Union Federation of Korea has established social contribution activities as a core management value and actively carries out social contribution activities through a dedicated department. As of the end of last year, we supported and invested 155.9 billion won, engaging in various activities such as briquette sharing, kimchi-making volunteer work, support for social enterprises, emergency fund support for natural disasters like the Pohang earthquake, Yeongdeok typhoon damage, Gangneung fire, support for traditional market merchants, and Saemaeul Geumgo concerts that brighten dark places. Recently, we have been providing emergency financial support to overcome the COVID-19 pandemic, with over 100 billion won already executed and 1.1 billion won collected and delivered through the Disaster Relief Association. The 'Love’s Small Savings Movement,' continuously implemented since 1998, is Saemaeul Geumgo’s representative social contribution brand, with a total cumulative performance of 97.8 billion won as of 2019.

We have also actively promoted the Saemaeul Geumgo model mainly in developing countries. Underdeveloped countries such as Myanmar and Uganda in Africa are at the economic level of Korea in the 1970s. We share our experience of contributing to poverty eradication and savings campaigns in the 1970s with these developing countries. Since the first overseas Saemaeul Geumgo was established in Myanmar in 2017, 31 are currently operating, and 11 are operating in Uganda.

- Your term has passed the halfway point; what are your plans for the remaining term?

▲ Saemaeul Geumgo is preparing for the era of 200 trillion won in assets. Although there have been various crises, we have quietly taken each step forward using these crises as stepping stones. During the remaining term, we will focus on discovering new growth engines to respond to rapidly changing financial environments so that Saemaeul Geumgo can establish itself as a representative indigenous financial institution of Korea.

To this end, we plan to actively support credit unions through various regulatory and institutional improvements, address disparities between rural and small credit unions, and devise win-win measures so that all Saemaeul Geumgo can grow together. We will also secure digital financial capabilities suitable for the 4th Industrial Revolution era. Saemaeul Geumgo has secured the stability of its IT system by relocating the IT center. Based on this, we will expand digital financial platforms such as bio-authentication and big data utilization to provide members with a stable digital experience.

Finally, we will fulfill our social responsibilities. Since its inception in 1963, active social contribution activities have been a major driving force behind Saemaeul Geumgo’s growth to reach 200 trillion won in assets. Saemaeul Geumgo will continue to respect social values, lead job creation, and foster the social economy, which supports economically vulnerable groups in the region, revitalizing the local economy. Saemaeul Geumgo will strive even harder to ensure that members and residents can be happy in the closest places.

This content was produced with the assistance of AI translation services.