The financial authorities reported a decrease in insolvent business sites in the real estate project financing (PF) trading platform, which has been in operation since January this year. It is analyzed that the financial sector has started to organize insolvent business sites as the Financial Supervisory Service has increased the pressure for restructuring through on-site inspections of savings banks.
According to the financial sector on the 10th, the number of PF business sites announced for sale by the financial authorities on the platform has decreased from 395 at the end of the previous month to 357 as of the end of last month. This is the first time that the number of business sites for sale has decreased since the platform began operating in January.
Since January, the financial authorities have sequentially disclosed the business sites available for sale on the platform. As a result, the number of business sites increased steadily, from 195 in January to 369 in February, 384 in March, and 395 in April. The financial authorities explained that all business sites subject to platform disclosure have been released, excluding unavoidable reasons such as lawsuits.
In particular, the number of business sites designated as savings banks as the representative financial institution of the main creditor group has decreased from 125 to 100. As the number of business sites decreased, the total exposure of the financial sector to real estate PF risks fell from 6.7 trillion won at the end of March to 6.2 trillion won at the end of last month, a decrease of 500 billion won.
The scale of sales through the information disclosure platform is expected to further increase this month. The Financial Supervisory Service noted that negotiations for a negotiated contract involving 400 billion won among the publicly disclosed business sites are underway. The Financial Supervisory Service stated that the visibility of interested buyers through the platform is increasing, resulting in successful disposals.
The Financial Supervisory Service began on-site inspections of 10 savings banks, starting with OK Savings Bank, in mid-last month. These banks have been slow to sell their insolvent PF business sites. It is interpreted that, due to increasing pressure from the Financial Supervisory Service, the savings bank sector, which has been passive regarding PF restructuring, has begun the sale of business sites.
The financial authorities plan to reorganize about half of the total insolvent PF business sites, amounting to 23.9 trillion won, by the end of this month, aiming to restructure an additional 3.5 trillion won in the second quarter to achieve this goal.
The savings bank sector, which has a large scale of insolvent PF, plans to reorganize business sites amounting to a maximum of 1.5 trillion won through the fourth normalization fund this month. They have decided to establish a subsidiary to support the purchase of non-performing loans (NPL) centered around the Korea Savings Bank Association within the first half of the year.