The Financial Supervisory Service announced on the 29th that 41 corporations have been selected for the 'main obligor group' that needs to undergo a financial stability assessment from its main creditor bank due to high debt.
According to the FSS, nine corporations, including Hankook & Company, Young Poong, MDM Group, Hyundai Department Store, and Aekyung, have been included in the main obligor group. Four corporations, including Kumho Asiana, Hanon Systems, and Hoban Construction, have been excluded from the main obligor group. The newly included nine corporations have seen their total borrowings increase due to new business investments and mergers. Kumho Asiana and Hanon Systems were excluded due to acquisitions, while Hoban Construction and SM reduced their debts to exit the main obligor group.
The main obligor group has increased from 36 last year to 41 this year. The 41 corporations belonging to this group have total borrowings exceeding 2.4 trillion won, and the remaining bank credit extension balance exceeds 1.4 trillion won.
Continuing from last year, the corporation with the highest debt in the main obligor group is SK, followed by Hyundai Motor in second place. Samsung, Lotte, and LG follow, maintaining the same order as last year in the top five conglomerates.
The bank with the most main obligors is Woori Bank, overseeing 11 banks, including Samsung, LG, and Hanwha. Hana Bank (9), Shinhan Bank (8), Industrial Bank of Korea (7), and Kookmin Bank (3) follow.
The number of corporations belonging to the 41 main obligors is 6,928, an increase of 507 compared to last year's 6,421. The number of corporations by group is as follows: Hanwha (940), SK (846), Samsung (634), Hyundai Motor (505), and CJ (399).
☞What is the main obligor group?
According to the banking supervisory regulations, the corporations in this group have total borrowings exceeding 0.1% of the nominal gross domestic product two years prior at the end of the previous year and have bank credit extension balances exceeding 0.075% of the total bank credit extension balance two years prior at the end of the previous year. The main creditor banks evaluate the financial structure of the main obligor group and enter into agreements for financial structure improvement to manage credit risk.