Top 5 companies’ 3rd quarter delinquency rate: 6.9%
The amount in arrears also tripled to 195.9 billion.
The delinquency rate of real estate project financing (PF) lent to developers by the top five savings banks has tripled in just one year. According to the management disclosures of SBI, OK, Welcome, Pepper, and Korea Investment Savings Bank on the 4th, the real estate PF delinquency rate of these five companies was 6.92% as of the end of September. It increased by 4.52% points compared to the delinquency rate in the same period last year, which was 2.4%.
As of the end of the third quarter, OK Savings Bank’s real estate PF delinquency rate was 9.07%, up 5.43 percentage points from the same period last year. During the same period, Korea Investment Savings Bank (6.7%) jumped by 4.85 percentage points, Pepper Savings Bank (4.93%) jumped by 4.93 percentage points, and Welcome Savings Bank (4.42%) jumped by 4.39 percentage points. At the end of the third quarter, SBI Savings Bank’s real estate PF delinquency rate was 6.21%, up 6.01 percentage points from last year.
Developers faced problems repaying loans as unsold properties continued to rise due to high interest rates. The real estate PF delinquency of five savings banks nearly tripled from 70.8 billion won to 195.9 billion won. On the other hand, the amount of credit extended (loan + payment guarantee) lent by savings banks for real estate PF shrank from 2.9423 trillion won to 2.8307 trillion won.
As the real estate PF delinquency rate rose, savings banks created a PF normalization support fund worth around 100 billion won in September and October. This is to shake off bad debt by selling overdue bonds. Fund funds are mainly used to sell non-performing loans (NPL) of bridge loans, which are in the early stages of PF. Savings banks’ position is that “the current delinquency rate is at a sufficiently manageable level.” The loan loss reserves accumulated by 79 savings banks across the country to prepare for losses amounted to KRW 2.6908 trillion, an increase of KRW 759.8 billion from last June (KRW 1.931 trillion).
Reporter Seong Kim
2023-12-04 14:50:35
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