Financial Sector Real Estate PF Loans Increase by 1.8 Trillion Won Over Three Months... Delinquency Rate Rises

Delinquency Rate at 1.19% as of the End of December Last Year

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Real estate project financing (PF) loans in the financial sector, which are causing instability in the financial market, increased by 1.8 trillion won over 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 was recorded at 129.9 trillion won as of the end of last year. This is an increase of 1.8 trillion won compared to 128.1 trillion won at the end of September last year. The delinquency rate of real estate PF loans in the financial sector rose by 0.33 percentage points from 0.86% at the end of September last year to 1.19% at the end of December last year.

Looking at the changes in the outstanding balance of real estate PF loans by industry during the same period, banks increased by 2.1 trillion won and insurance companies by 200 billion won. On the other hand, savings banks and specialized credit finance companies decreased by 200 billion won and 300 billion won, respectively, during this period.

In terms of delinquency rates alone, specialized credit finance companies increased by 1.13 percentage points to 2.20% in December last year 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 said, "The reckless real estate PF loans by some securities companies focused only on fee income seem to be spreading as a risk across the entire financial investment industry," adding, "The financial authorities should re-examine stabilization measures to prevent the risk of insolvency from materializing and promptly prepare moral hazard countermeasures for problematic securities companies."

A financial authority official said, "The scale of delinquencies in securities companies and specialized credit finance companies is low compared to their own capital," and added, "Due to real estate PF loan regulations introduced during past crises, delinquencies are not concentrated in specific securities or credit finance companies."

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