Shinhan and Woori Bank Decide to Prepay Half of Principal to Lime Fund Victims (Comprehensive)

[Asia Economy Reporter Jo Gang-wook] Shinhan Bank and Woori Bank have finalized an advance payment compensation plan for victims of Lime Asset Management funds.

According to the financial sector on the 5th, Shinhan Bank held a board meeting that morning and resolved to make an advance payment (compensation) of 50% of the principal amount to customers who subscribed to the Lime Asset Management CI Trade Finance Fund sold by the bank.

Shinhan Bank explained that although there were many internal and external disagreements regarding the plan for the seller to pay part of the investment before asset recovery due to losses caused by the inclusion of non-performing assets by Lime Asset Management, the management and outside directors actively united their intentions to make this decision for proactive customer protection.

This advance payment plan involves paying 50% of the subscription amount of the Lime Asset Management CI Trade Finance Fund in advance and then settling the balance later based on the asset recovery from the fund and the compensation ratio determined by the Financial Supervisory Service's Dispute Mediation Committee. Customers who accept the advance payment plan will still be allowed to proceed with dispute mediation and lawsuits through the Financial Supervisory Service.

A Shinhan Bank official said, "Since the redemption of the Lime Asset Management CI Trade Finance Fund was suspended, we have been reviewing various customer protection measures, but due to legal issues regarding advance payments for investment products, the process was very difficult, and it took a long time to finalize the plan. We hope this will alleviate some of the difficulties faced by customers who trusted and waited for Shinhan Bank, and we will do our best in asset recovery going forward."

Shinhan Bank plans to finalize the details and soon hold briefing sessions for frontline branch employees and will also engage in communication with customers in the future.

Woori Bank also held a board meeting on the same day and confirmed that it would accept the joint advance payment plan for Lime fund sellers in the banking sector.

The funds subject to advance payment are Pluto and Thetis, which have had redemption delays, totaling about 260 billion KRW. The trade finance fund currently under dispute mediation by the Financial Supervisory Service is excluded.

Woori Bank will pay the amount calculated by adding the minimum expected recovery amount and the loss compensation amount after individual agreements with investors. The advance payment amount per fund is about 51% of the principal. However, the AI Premium Fund, which applies TRS (Total Return Swap), is expected to be at the level of about 30% of the principal.

Investors will receive the advance payment compensation through individual private settlement contracts with Woori Bank and will later settle the difference between the final compensation amount decided through the Financial Supervisory Service's Dispute Mediation Committee and the advance payment compensation. Finally, compensation for the recovered investment funds and confirmed losses will be settled according to Lime Asset Management's asset liquidation plan.

A Woori Bank official said, "Since Lime Asset Management's asset liquidation plan will be implemented over five years, we decided to make an advance payment of part of the investment amount."

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