Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Savings banks urged to keep guard up against risks, support vulnerable
Financial Supervisory Service (FSS) Governor Lee Bok-hyun speaks during a meeting with 14 local savings bank leaders in central Seoul, Friday. Courtesy of the FSS
By Anna J. Park
By Anna J. Park
Financial Supervisory Service (FSS) Governor Lee Bok-hyun called on local savings bank leaders to manage their fiscal soundness by fully preparing ample reserves, while also asking them to continue providing loans for the countrys low credit-rating customers.
In a meeting with the CEOs of local savings banks on Friday morning, Governor Lee urged the lenders to continue supporting the livelihoods of lower-credit customers by offering loans targeting them. The CEOs of 14 savings banks, including SBI, OK, Welcome and more, gathered for the meeting with the FSS chief.
“When the end of the temporary financial benefits from earlier in the pandemic coincides with interest rate hikes, the repayment capacity of borrowers with low credit-ratings is expected to be further weakened,” Lee said during the meeting, asking the leaders of the lenders to expand support for those vulnerable borrowers specifically.
FSS Governor Lee Bok-hyun, eighth from left, stands next to the CEOs of various local savings banks in Seoul, Friday. Courtesy of FSS
In addition, he stressed the need to strengthen the banks' fiscal soundness management, particularly when it comes to household loans. He also urged the banks to prepare fully for any possibilities of insolvency by strengthening loan evaluations and checkups to protect against high inflation, high interest rates and soaring foreign exchange rates.
“Regarding corporate loans, banks are required to prepare against risks from project financing loans,” the FSS head said, urging the banks to assess project financing loans strictly.
Project financing loans account for about half of savings banks' entire loans to corporations, according to the FSS. The aggregate amount of project financing loans made by local savings banks has grown to 32.8 trillion won ($25.1 billion), as of the end of March ― a huge increase from the 21 trillion won logged at the end of 2020.