Korean Specialized Construction Mutual Aid Association "Expecting Record High Performance Last Year... Strengthening Win-Win Management"

Capital Contribution Surpasses 6 Trillion Won After 37 Years Since Establishment
First Achievement of Direct Guarantee for Overseas Clients

The Korea Federation of Construction Cooperatives (K-FINCO) announced on the 8th that it expects to achieve its highest performance since its establishment last year through active sales activities. In its 37 years since founding, the number of member companies surpassed 62,000, and the capital contribution exceeded 6 trillion won. Under solid financial soundness, the federation plans to further strengthen its 'member co-prosperity management' policy, which generates and returns profits.

Eunjae Lee, Chairman of the Korea Federation of Specialized Construction Contractors (K-FINCO). Provided by the Korea Federation of Specialized Construction Contractors.

Specifically, as of the end of last year, the construction guarantee sector provided credit worth 25.7 trillion won, achieving the highest performance ever. The federation explained that this was the result of actively discovering member companies that had not used the services and expanding customized financial services. In the construction mutual aid sector, through the first transaction audit event last year, it attracted mutual aid subscriptions worth 2.25 billion won from 820 member companies that had not used mutual aid products. The construction loan sector recorded 1.8232 trillion won. The federation is providing a special construction stability loan worth 300 billion won at interest rates lower than commercial banks. This has been implemented since 2023 and will be operated until the end of this year.

The asset management sector earned 179.7 billion won last year, growing 33% compared to the previous year (134.7 billion won). The performance, which had fallen to 91.4 billion won due to the 2022 financial market shock, successfully rebounded through strategic asset allocation and portfolio diversification.

Despite the downturn in the construction market, bond management remained stable. Last year, the guarantee payment claims due to member company insolvency amounted to 248.5 billion won, a 6% increase from the previous year (235.4 billion won). The federation explained that despite the increase in guarantee claims, it defended guarantee payments at a level lower than the target estimate through thorough pre-management and efforts to reduce claims withdrawal.

The federation reported that as a result of focusing on establishing a foundation for entering the overseas construction market since 2023, it achieved direct guarantee performance from overseas clients last month. This was the first time that overseas clients received federation guarantee certificates directly without re-guarantees from local or domestic financial institutions. Along with this, the federation strengthened its global network by meeting with local officials in Rwanda, Tanzania, Kuwait, and the United Arab Emirates (UAE), and laid the groundwork for cooperation on guarantee products by discovering overseas infrastructure projects. As a result, overseas guarantee performance increased by 191% compared to the previous year.

Furthermore, the federation stated that it is accelerating the practice of co-prosperity management. As part of this, it is actively implementing a dividend policy to alleviate member companies' financial difficulties. It paid out 102.8 billion won in cash dividends last year, which is 89% of the net profit for the 2023 fiscal year, marking the largest dividend among construction-related mutual aid federations. The federation expects to return even more dividends this year.

Lee Eun-jae, chairman of the federation, said, "As a result of the efforts of executives and employees under the goal of co-prosperity management through maximizing profits last year, we expect to surpass the record net profit of 145.2 billion won set in 2019," adding, "Since the construction industry is going through a difficult period, we will not hesitate to provide practical support such as expanding cash dividends and extending special loans to help members overcome the crisis."

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