Forecast Recovers 363.6 Billion Won from Savings Bank Crisis... Total Recovered Funds Reach 13 Trillion Won

Forecast: Publication of 'Mutual Savings Banks Restructuring Special Account Management White Paper'
Bad debt resolution funds投入 27.2 trillion KRW... Remaining balance 11.1 trillion KRW

Exterior view of the Korea Deposit Insurance Corporation located in Jung-gu, Seoul [Photo by Korea Deposit Insurance Corporation]

[Asia Economy Reporter Song Seung-seop] The Korea Deposit Insurance Corporation (KDIC) recovered 364.6 billion won last year from the funds it injected during the savings bank crisis. This brought the total amount recovered to about 13.2 trillion won, nearly half of the funds used for restructuring 31 companies in 2011.

According to the "2020 Mutual Savings Bank Restructuring Special Account Management White Paper" published by KDIC on the 31st, the debt balance of the "Mutual Savings Bank Restructuring Special Account" was identified as 11.1 trillion won at the end of last year. This is a decrease of about 2.7 trillion won from 13.8 trillion won two years ago.

The special account is an item established by KDIC to support the soundness of savings banks and was used to liquidate insolvent savings banks. A total of 27.2 trillion won was injected through insurance premiums from insured financial companies, issuance of deposit insurance fund bonds, and various borrowings.

KDIC recovers the injected funds by selling financial companies holding the funds or participating in bankruptcy procedures of insolvent financial companies and receiving bankruptcy dividends. It also uses methods such as loan repayments.

KDIC explained that it made efforts to maximize the recovery of support funds this year. Considering the difficult sales conditions due to COVID-19, it introduced a non-face-to-face sales method as a representative case. It also promoted project financing (PF) sites using drones and distributed explanatory materials through YouTube.

It was also announced that legal and diplomatic foundations were established to resume the Cambodia Camko City project, the largest overseas asset. KDIC won a lawsuit for the return of local business shares in Cambodia in February last year, and in December, the "Korea-Cambodia Joint Task Force" was launched between the two governments.

Additionally, to support the economic recovery of debtors, KDIC implemented repayment deferral policies, applying up to a 90% reduction rate in debt restructuring for debtors affected by COVID-19.

A KDIC official stated, "The corporation plans to thoroughly manage preemptive risk management to prevent additional insolvency of savings banks and others."

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