Saemaul Geumgo Posts 1.3 Trillion Won Loss in First Half... Delinquency and Insolvency Indicators Worsen

"Sale of Delinquent Loans and Accumulation of Loan Loss Provisions"
Delinquency Rate Rises to 8.37%, Up 1.13 Percentage Points from First Half of Last Year

Saemaul Geumgo recorded a net loss of 1.3287 trillion won in the first half of this year. This represents an increase in losses of 126.8 billion won compared to the same period last year, when the loss was 1.2019 trillion won. The Ministry of the Interior and Safety explained that this was due to increased loan-related costs, citing the sale of delinquent loans and the accumulation of loan loss provisions as the reasons.

On August 29, the Ministry of the Interior and Safety released the first-half business results for 1,267 Saemaul Geumgo branches, revealing these figures. Asset soundness indicators also worsened compared to the first half of last year. The overall delinquency rate rose to 8.37%, up 1.13 percentage points from the same period last year. The corporate loan delinquency rate increased by 1.82 percentage points to 12.97%, while the household loan delinquency rate rose by 0.4 percentage points to 2.17%. The ratio of substandard and below loans also climbed from 9.08% to 10.73% during the same period.

The net capital ratio, which indicates capital adequacy, fell by 0.53 percentage points year-on-year to 7.68%, but still remained above the minimum regulatory requirement of 4%.

As of the end of June, Saemaul Geumgo's total assets stood at 288.4 trillion won, down 500 billion won from the previous year, but total deposits increased by 700 billion won to 260.6 trillion won. Total loans grew by 900 billion won to 181.7 trillion won. Corporate loans increased by 1.1 trillion won to 104.3 trillion won, and household loans rose by 2 trillion won to 77.4 trillion won.

The Ministry of the Interior and Safety stated, "Challenging management conditions persist due to the delayed recovery of the real estate market and the overall cap on household loans, making it difficult to improve profitability. However, the net capital ratio remains above the regulatory standard, so the ability to absorb losses is at a stable level." The ministry added, "We will manage to reduce the scale of losses starting next year through management efficiency measures such as loan-to-deposit ratio control and budget reduction."

Additionally, the ministry said, "We will strengthen the resolution of non-performing loans through asset management companies and actively guide and supervise Saemaul Geumgo so that it can fulfill its role in supporting local communities and providing financial services to ordinary citizens." The ministry also emphasized, "To eradicate financial accidents, we will strengthen internal controls and actively exercise supervisory authority, including prompt corrective actions and direct sanctions against executives and employees of insolvent branches, in accordance with the revised Saemaul Geumgo Act implemented last year."

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