Lee Criticizes "Predatory Finance"... Shinhan Card and Hana Bank to Sell 'Evergreen' Bonds (Comprehensive)

President Lee Criticizes "Primitive Predatory Finance"
Kookmin Bank Considers Sale... IBK Expresses "Consent to Sell"

After President Lee Jae-myung criticized the long-term delinquent debt collection practices of Sangnoksu First Securitization Specialty Company Limited (Sangnoksu), a private bad bank established jointly by banks and credit card companies in response to the 2003 credit card crisis, as "predatory finance," financial institutions have begun to sell off their long-term delinquent receivables.

President Lee Jae-myung is speaking at the Cabinet meeting combined with the Emergency Economic Inspection Meeting held at the Blue House on the 12th. Photo by Yonhap News Agency

On May 12, Shinhan Card announced that it would sell all of its receivables corresponding to its 30% stake in Sangnoksu's long-term delinquent debt to the SaeDoYak Fund of Korea Asset Management Corporation (KAMCO).

A Shinhan Card official stated, "We deeply regret not recognizing the plight of borrowers who have been in economic hardship for more than 20 years sooner," adding, "We determined that the sale of all receivables could no longer be postponed, so we made the decision to proceed."

Hana Bank has also decided to sell its portion of Sangnoksu's long-term delinquent receivables to the KAMCO SaeDoYak Fund. Hana Bank currently holds a 10% stake.

KB Kookmin Bank and KB Kookmin Card are also considering selling their receivables. However, since the agreement of all involved parties—Shinhan Card, Woori Bank, Industrial Bank of Korea (IBK), Woori Card, and three private lenders, each holding a stake—is required, they are reportedly working to obtain their consent.

A KB Kookmin Card official commented, "Although we hold a stake, we do not have any receivables and thus have not received any dividends," but also said, "We are internally reviewing the possibility of agreeing to the sale together with KB Kookmin Bank and other related financial institutions."

Industrial Bank of Korea (IBK) also agrees with handling the stakes held by financial institutions related to Sangnoksu. At a press conference that day, IBK CEO Jang Minyoung responded to reporters' questions by saying, "We have already tacitly agreed to the sale (transfer)," and added, "There is no particular reason to continue holding these receivables, so we will resolve the matter as soon as possible."

Regarding the distribution of stakes in Sangnoksu's receivables: Shinhan Card holds the largest share at 30%; Hana Bank, Industrial Bank of Korea, and Woori Card each hold 10%; KB Kookmin Bank and KB Kookmin Card hold 5.3% and 4.7%, respectively. The remaining shares are held by three private lending companies, each with 10%.

Once these receivables are transferred to the SaeDoYak Fund, debt collection efforts against borrowers will cease immediately. Depending on the borrower's repayment ability, debt restructuring and installment repayment will be pursued, and for those without repayment ability, such as recipients of basic livelihood support, the receivables will be automatically written off within one year.

Sangnoksu does not participate in the government's SaeDoYak Fund, which is a policy aimed at resolving small-scale delinquent receivables.

In response, President Lee, on X (formerly Twitter) on the same day, attached an article highlighting that borrowers are missing out on debt relief benefits because Sangnoksu does not participate in the SaeDoYak Fund, and pledged to resolve the issue.

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