Financial Sector Real Estate PF Loans Increase by 1.8 Trillion Won Over 3 Months
Real estate project financing (PF) loans in the financial sector increased by 1.8 trillion KRW in three months, and the delinquency rate also rose.
According to data submitted by the Financial Supervisory Service to Rep. Yoon Chang-hyun of the People Power Party on the 7th, the outstanding balance of real estate PF loans in the financial sector stood at 129.9 trillion KRW as of the end of last year. This is an increase of 1.8 trillion KRW from 128.1 trillion KRW at the end of September last year over three months.
Looking at the changes in outstanding real estate PF loans by industry during this period, banks increased by 2.1 trillion KRW, and insurance companies by 200 billion KRW. On the other hand, savings banks and specialized credit finance companies decreased by 200 billion KRW and 300 billion KRW, respectively.
The delinquency rate of real estate PF loans in the financial sector rose from 0.86% at the end of September last year to 1.19% at the end of December, an increase of 0.33 percentage points. Among them, the delinquency rate of specialized credit finance companies increased by 1.13 percentage points to 2.2% in December compared to September last year. Securities companies and insurance companies also increased by 2.22 percentage points and 0.2 percentage points, respectively.
Rep. Yoon Chang-hyun of the People Power Party said, "The reckless real estate PF loans by some securities companies focused solely on fee income are spreading as a risk throughout the financial investment industry," adding, "The financial authorities must re-examine stabilization measures to prevent the risk of insolvency from materializing and promptly prepare moral hazard countermeasures for problematic securities companies."
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In this regard, the Financial Supervisory Service forecasted that although the delinquency rate of some real estate PF loans is high, the impact on soundness will be limited considering the loan size and ratio to equity capital.
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