FSS to Conduct On-Site Inspections of Mutual Savings Banks Next Month

The Financial Supervisory Service (FSS) will conduct on-site inspections of mutual financial cooperatives (Nonghyup, Suhyup, Shinhyup, and Sanlimjoap) next month.

According to the financial sector on the 19th, the FSS plans to order the management of delinquency rates and the accumulation of loan loss provisions through on-site inspections of some mutual financial cooperatives next month. Since the mutual financial sector announces business performance semiannually, the intention is to proactively manage delinquency rates and accumulate provisions by the end of the year.

In addition, prior to the on-site inspections, the FSS plans to guide the National Mutual Finance Federation to conduct asset soundness checks on deficit cooperatives.

Recently, as the real estate market has slowed down, the corporate loan delinquency rate in the mutual financial sector in the first half of this year rose to 4.12%, up 1.98 percentage points compared to the end of last year. During the same period, the overall delinquency rate increased by 1.28 percentage points to 2.8%.

The FSS plans to supervise so that asset soundness can be managed through the disposal and sale of non-performing loans and the accumulation of loan loss provisions, and to strengthen loss absorption capacity. For deficit cooperatives, it will also request restraint in dividends based on the year-end settlement.

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

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