Lee Responds to Predatory Finance Criticism: "Will Meet Sangnoksoo Shareholders to Urge Participation in New Leap Fund"

Chairman Lee Eokwon: "Seeking Solutions to the Issue"
Shinhan Card, Hana Bank, and Others Decide to Sell Bad Debt

Lee Eokwon, Chairman of the Financial Services Commission, stated on May 12 that he would meet separately with the shareholders of ‘Sangnoksoo’, a non-performing loan resolution company established in 2003 to deal with the credit card crisis, to request their participation in the New Leap Fund, following criticism that debtors have been suffering for an extended period because Sangnoksoo has not joined the fund.

Chairman Lee made these remarks during a Cabinet meeting and emergency economic review meeting held at the presidential office on the same day, responding after President Lee expressed criticism about how financial companies and financial authorities have been handling the issue.

Earlier that morning, President Lee shared a report on his social media account X (formerly Twitter), highlighting that the private bad bank Sangnoksoo has been collecting on 700 billion won worth of non-performing loans for over 20 years. He commented, “I had no idea that such primitive predatory finance is still blatantly tightening the noose around ordinary people,” and added, “How could the authorities have failed to even discover such corruption until now?”

Chairman Lee explained, “Since the current administration, the Financial Services Commission has created the New Leap Fund to help resolve long-term overdue loans held by financial institutions and support debtors' rehabilitation. We have been continuously purchasing these loans.” He added, “Through a voluntary agreement among financial institutions, 2,736 out of 2,753 institutions—99.4%—have joined the agreement and are participating in loan purchases, ceasing debt collection, and extinguishing claims.”

Regarding Sangnoksoo, he said, “It is a special purpose company established with funds from multiple financial institutions, not an individual financial institution. We have continuously requested cooperation and sent official documents to encourage participation in the New Leap Fund.” He continued, “Sangnoksoo has insisted that, as a joint-stock company formed by several organizations, the consent of all shareholders is necessary. However, in reality, their reluctance likely stems from profit concerns. I will contact the shareholders directly to seek their approval and will consider various solutions to address the issue.”

Sangnoksoo is a private bad bank created in 2003 through joint investment by banks and credit card companies in response to the credit card crisis. Immediately following President Lee’s remarks, shareholders such as Shinhan Card and Hana Bank decided to sell their long-term overdue loans to the New Leap Fund. KB Kookmin Bank, KB Kookmin Card, and IBK Industrial Bank of Korea are also considering selling their loans.

Shinhan Card holds the largest stake in Sangnoksoo at 30%, while Hana Bank, IBK Industrial Bank of Korea, and Woori Card each hold 10%. KB Kookmin Bank and KB Kookmin Card own stakes of 5.3% and 4.7%, respectively. The remaining shares are held equally among three loan companies, each with 10%.

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