Forecast, White Paper Published Documenting Savings Bank Restructuring Experience

[Asia Economy Reporter Kwon Haeyoung] The Korea Deposit Insurance Corporation (KDIC) published the '2019 Mutual Savings Banks Restructuring Special Account Management White Paper' on the 30th, which contains experiences from the restructuring of savings banks.

This white paper was published for the ninth time since 2012 to ensure transparency regarding the operation of the special account under the Depositor Protection Act. Since injecting 27.2 trillion KRW to support the restructuring of 31 savings banks starting with Samhwa Savings Bank in January 2011, it details all processes including efforts to recover support funds through the sale of project financing (PF) real estate and overseas assets acquired during the savings banks' liquidation process, as well as investigations into responsibility for insolvency.

KDIC is making various efforts to recover support funds, having recovered 688.8 billion KRW through bankruptcy dividends from insolvent savings banks in 2019, and a total of 12.9 trillion KRW by the end of 2019. Based on these recovery efforts, it achieved a reduction of 1.5 trillion KRW in special account liabilities during 2019.

KDIC is promoting various sales methods such as joint auctions, court/onbid/auction auctions according to the characteristics of each asset to quickly and efficiently sell assets held by the bankruptcy foundation. In particular, it established a dedicated department for the smooth recovery of overseas assets such as Kamco City bonds (680 billion KRW) and is making active recovery efforts by building cooperative systems with related organizations including the National Assembly, government, and prosecution.

A KDIC official stated, "We secured a recovery foundation through business normalization by winning the final lawsuit last month regarding the return of local business shares in Cambodia filed by insolvent debtors," and added, "KDIC plans to thoroughly implement preemptive risk management to prevent additional insolvency possibilities in savings banks and others."

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