Savings Bank Industry to Expand 'PF Normalization Support Fund' to 100 Billion Won by Year-End

The savings bank industry has launched its own normalization support fund to ensure a smooth landing in the project financing (PF) market.

According to the Financial Supervisory Service on the 5th, the Korea Federation of Savings Banks and 10 savings banks participated as investors to establish a fund worth a total of 33 billion KRW on the 26th of last month.

By the end of this year, the fund size is expected to expand to about 100 billion KRW through additional funding involving all savings banks and external investments.

Until now, the savings bank industry has pursued maturity extensions for viable projects through voluntary agreements among major creditors, but recognizing the need for capital supply to clear PF non-performing loans and support normalization within the sector itself, they decided to create and operate this fund.

Through this fund, the savings bank industry plans to inject capital by investing via asset securitization or purchasing non-performing loans within the fund, depending on the scale and characteristics of the PF projects.

Currently, the fund management company is reviewing the selection of investment projects and their feasibility, and after selecting the projects and receiving reviews from external advisory institutions, on-site inspections will be conducted. The acquisition of projects is planned to begin next month.

A Financial Supervisory Service official stated, "We highly appreciate the industry's independent efforts and plan to listen to various market opinions to provide necessary support so that the fund can operate smoothly."

Financial Supervisory Service, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

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