"Financial Sector Real Estate PF Loans Increase 88% Over 4 Years... Risk Management Needed"
Rep. Kim Han-jung Urges Financial Authorities for Proactive Risk Management Measures
[Asia Economy Reporter Park Sun-mi] The outstanding balance of real estate project financing (PF) loans in the domestic financial sector has increased by more than 88% over the past four years. There are growing calls for financial authorities to establish more proactive risk management measures for real estate PF loans.
On the 2nd, Kim Han-jung, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, citing data from the Financial Supervisory Service (FSS), revealed that as of the end of last year, the outstanding balance of real estate PF loans in the domestic financial sector stood at 88.4838 trillion KRW, an increase of 41.4582 trillion KRW (88.2%) compared to 47.0256 trillion KRW at the end of 2016. The rapid increase in real estate PF loans is mainly due to the favorable real estate market conditions, but factors such as difficulties in overseas alternative investments due to COVID-19 (insurance companies) and restrictions on direct real estate investments (credit finance companies, insurance companies) are also cited.
By financial sector, insurance companies had the largest amount at 36.3826 trillion KRW, followed by banks (23.8572 trillion KRW), credit finance companies (13.7997 trillion KRW), savings banks (6.8647 trillion KRW), securities companies (4.2691 trillion KRW), and mutual finance (3.3105 trillion KRW). The average interest rate on real estate PF loans was lowest for insurance companies at 3.24%, followed by mutual finance (3.47%), credit finance companies (4.59%), securities companies (5.78%), and savings banks (6.91%).
Hot Picks Today
Samsung Electronics Introduces New "Special Performance Bonus" for Semiconductors, Paid Entirely in Company Shares
- "Could I Also Receive 370 Billion Won?"... No Limit on 'Stock Manipulation Whistleblower Rewards' Starting the 26th
- "From a 70 Million Won Loss to a 350 Million Won Profit with Samsung and SK hynix"... 'Stock Jackpot' Grandfather Gains Attention
- Will Soaring Semiconductor Prices Support a Gradual Stabilization of the Household Debt Ratio? Why [BOK Focus]
- "Who Is Visiting Japan These Days?" The Once-Crowded Tourist Spots Empty Out... What's Happening?
Assemblyman Kim urged the supervisory authorities to implement more proactive risk management measures, warning that the rapid increase in real estate PF loans raises the risk of financial instability. He stated, "Although the delinquency rate and the balance of non-performing loans on real estate PF loans appear to be decreasing, indicating no apparent problems," he emphasized, "given that real estate PF loans are rapidly increasing backed by the booming real estate market, the supervisory authorities should prepare more proactive risk management measures to ensure market stability.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
