Savings Banks Expand Second Fund to Around 350 Billion Won to Normalize PF

Number of Fund Participants Increases by 5 to Total 27 Companies

The savings bank industry has decided to establish a second non-performing loan (NPL) cleanup fund worth 350 billion KRW to normalize real estate project financing (PF).

According to the Korea Federation of Savings Banks on the 29th, a total of 27 companies will participate in the second fund, including top PF loan providers and savings banks affiliated with financial holding companies. This is an increase of 5 participants and 150 billion KRW in fund size compared to the initial plan (22 companies, 200 billion KRW). Multiple fund managers will be selected.

[Image source=Yonhap News]

The savings bank industry plans to increase the number of participating savings banks and explore various sales structures to prepare third and fourth funds. Additionally, they intend to promptly resolve non-performing assets through revitalizing auctions and self-write-offs to enhance soundness.

Previously, the industry established a first fund worth 33 billion KRW in September last year and completed investments in March. They also agreed to transfer 200 billion KRW worth of non-performing loans to the Korea Asset Management Corporation (KAMCO).

Oh Hwa-kyung, Chairman of the Korea Federation of Savings Banks, stated, “The goal of the second fund is to swiftly and efficiently clean up non-performing assets within the industry.” He added, “It is significant that the industry is actively making efforts to improve soundness by managing NPLs on its own and ensuring the smooth landing of PF loans.”

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