OK Capital Launches Real Estate PF Evaluation Committee: "Comprehensive Review of Bonds and Projects"

"Strengthening Internal Controls to Restore Sales Performance"
Pursuing Both Credit Normalization and New Business Development

OK Capital announced on the 25th that it will launch a Business Feasibility Evaluation Committee to improve its revenue structure. The company plans to conduct a thorough review of the real estate sector, which accounts for the majority of its portfolio. The New Business Division will explore new business opportunities to secure sustainable growth drivers.

The company explained that due to the prolonged issues with real estate project financing (PF) defaults, it reorganized its structure to establish a separate team and enhance its risk management system. The focus was on increasing organizational transparency by clearly defining responsibilities through departmental segmentation and job separation.

First, the "Real Estate PF Business Feasibility and Post-Management Evaluation Committee" was established. The committee operates as a task force (TF) composed of credit management and PF experts. It will comprehensively review real estate-related bonds and project statuses, including bridge loans and main PFs handled so far, and examine recovery strategies in more detail.

To provide legal support related to bond recovery, Kim Jin-young, Head of Compliance Support at OK Financial Group’s Legal Department, has moved to OK Capital to participate as a committee member. The committee will conduct a full inspection of all real estate projects as well as the business feasibility evaluation system. It will also rigorously assess compliance with PF-related regulations and management standards.

The focus is on securing growth momentum through the recovery of sales capabilities. The organization, which was previously operated mainly around investment banking (IB) finance, has been further segmented to clearly distinguish the roles and responsibilities of each department.

Accordingly, the Corporate Finance Division will be responsible only for new sales. The New Business Division will focus on managing and post-managing projects with potential for normalization through asset revaluation. It will also identify new areas for business entry.

OK Capital plans to restructure its real estate-centered business structure and focus on restoring sales capabilities this year, then diversify its business portfolio in the mid to long term.

An OK Financial Group official said, "Our top priority is to break away from the existing sales structure and methods, conduct a comprehensive review of the bonds held by the capital company from an objective perspective, and maintain stable management of soundness indicators. After returning to a normalization track, we will move away from the real estate PF-centered business portfolio that we have focused on and explore various business areas."

Meanwhile, OK Capital has stopped new real estate sales since 2023 and set aside large-scale reserves to minimize losses in the real estate sector. Since the end of 2022, it has expanded its loss absorption capacity through a conservative reserve accumulation policy. It has improved its financial structure by gradually carrying out asset restructuring such as debt reduction (deleveraging).

To increase its equity capital, it merged Yes Asset Loan, an affiliate within the group, in 2023. It has continued to repay borrowings. As of the third quarter of last year, borrowings stood at 934.5 billion KRW, down 1.9735 trillion KRW (67.9%) from 2.908 trillion KRW at the end of 2022. Capital adequacy ratios such as the leverage ratio (2.3 times) and adjusted capital adequacy ratio (42.4%) were also maintained at healthy levels.

During the same period, the reserve balance was 314.5 billion KRW. The bad debt reserve ratio was 116.1%, exceeding the financial supervisory authority’s regulatory level of 100%.

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