Eun Sung-soo: "5 Major Banks Reach Consensus to Extend 'COVID Loans' by 6 Months... Soft Landing Plan to Be Announced Soon"

Eun Seong-su, Financial Services Commission Chairman - Private Meeting with Chairmen of 5 Major Bank Holding Companies
"Agree on Maturity Extension in Broad Terms"
"'20% Dividend', Financial Companies Need to Build More Reserves... Not Intended to Harass"

[Image source=Yonhap News]

[Asia Economy Reporters Wondara and Song Seungseop] The holding companies of the five major banks have reached a consensus to further extend the maturity of 'COVID-19 loans' until September this year. Previously, the banking sector had twice extended the principal and maturity repayment of loans for small and medium-sized enterprises and small business owners from September last year to March this year, in accordance with the government's 'COVID-19 Financial Support Policy.'

"After the grace period ends, borrowers will be allowed to choose repayment methods"

On the 16th, Eun Sungsoo, Chairman of the Financial Services Commission, met with reporters after a private meeting at the Korea Federation of Banks in Jung-gu, Seoul, with KB Financial Group Chairman Yoon Jongkyu, Shinhan Financial Group Chairman Cho Yongbyung, Hana Financial Group Chairman Kim Jungtae, Woori Financial Group Chairman Son Taeseung, and NH Nonghyup Financial Group Chairman Son Byunghwan, stating, "I explained that extending the maturity is inevitable, and the majority agreed. Broadly, the holding companies agreed to a six-month extension."

Chairman Eun said, "There was also agreement on the need for a soft landing, and there is some time to decide on the specifics. We will announce the soft landing plan without delay." As a soft landing support measure, a long-term and installment repayment inducement plan was discussed to allow borrowers to choose repayment methods based on their situation after the grace period for principal and interest repayment ends.

In response to the question, "There are criticisms that continuous loan maturity extensions actually increase risk," Chairman Eun said, "It's not entirely absent," but added, "Under normal circumstances, the risk would certainly be a burden, but when considering whether to leave COVID-19 unattended or to bear it, the answer becomes clear." He further stated, "Since we are aware of the risks, we must manage them well. Holding companies or financial firms need to build up more reserves, among other measures."

Regarding the controversy over the '20% dividend cap,' he said, "This is something not only Korea but the entire world is doing," and added, "If we just say 'refrain,' it would be vague. The recommendation of a 20% dividend was made to ensure transparency, not to interfere or harass."

On rumors about the reappointment of Kim Jungtae as Chairman of Hana Financial Group, he said, "The board of directors and the chairman nomination committee surely know well what the financial authorities have pointed out, and I think they will act reasonably accordingly." He continued, "Basically, it will be done according to the procedures of the board and the nomination committee," and added, "It is inappropriate for financial authorities to comment on this, and it is right to respect that." Regarding the possibility of Financial Supervisory Service Governor Yoon Seokheon’s reappointment, he avoided commenting, saying, "It is not proper to discuss personnel matters."

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