[2020 National Audit] Export-Import Bank Supports 38 Trillion KRW for Four Years to Marginal Companies... Deterioration of Soundness

Total of 274 Zombie Companies in 2019, More Than Double the 129 in 2016

[Asia Economy Reporter Kangwook Cho] There is a growing concern over the deterioration of asset soundness as the number of marginal companies supported by the Export-Import Bank, which cannot even cover their interest payments with annual profits, is rapidly increasing.

According to data submitted by the Export-Import Bank to Kim Tae-heum, a member of the National Assembly's Planning and Finance Committee from the People Power Party, the total amount supported for marginal companies over the past four years reached 37.8 trillion KRW.

By year, the amount decreased from 12.7448 trillion KRW in 2016 to 9.6742 trillion KRW in 2017 and 7.5287 trillion KRW in 2018, but increased again to 7.9261 trillion KRW last year.

In particular, the number of marginal companies among those supported by the bank has surged annually, doubling from 129 companies in 2016 to 274 companies last year.

By company size, the number of marginal small and medium-sized enterprises (SMEs) has noticeably increased. The number of marginal SMEs rose nearly threefold from 69 in 2016 to 200 last year, and the support amount also significantly increased from 705.9 billion KRW to 1.2344 trillion KRW.

As the number of marginal companies and non-performing loans increase, the asset soundness of the Export-Import Bank is deteriorating. As of June this year, the BIS ratio stood at 13.45%, down 1.1% compared to last year. To offset this, the bank increased its capital by receiving 578.3 billion KRW in equity investment from the government in July this year.

Assemblyman Kim stated, "The proportion of marginal companies among the bank's supported loans is significantly increasing, which is concerning," and added, "Despite the role of policy finance, including expanded support related to COVID-19, more thorough management of asset soundness is necessary."

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