Gov't pledges financial support for affected companies

Finance Minister to hold meeting today to discuss additional measures

By Kim Bo-eun

State-run and commercial banks have agreed to extend new loans or roll over maturing loans for firms affected by Japan removing Korea from its whitelist of trusted trading partners.

“We will offer funds for the companies so that they can overcome any immediate difficulties and also provide money needed in the long-term for R&D, and M&As,” Financial Services Commission Chairman Choi Jong-ku said Saturday.

The measures were discussed in an emergency meeting held the same day with the Financial Supervisory Service, and state-run and commercial banks.

“Commercial banks are checking on companies that are set to be affected, and are coming up with measures such as lowering interest rates.”

Japan announced the removal of Korea from a group of countries given preferential treatment in purchasing materials that can be used for military purposes, Friday. This comes in addition to the tightened exports to Korea of key resource materials for semiconductors and displays that took effect July 4.

Choi said the banks agreed to come up with the most efficient form of support, by aligning measures with those of the government.

Those eligible for government assistance will be companies that have been affected by the export restrictions, including those that imported or purchased restricted items since Jan. 1, 2018.

The Financial authorities have drawn up a 3.8 trillion ($3.16 billion) won package to assist the firms.

Small-and medium-sized enterprises will be able to receive liquidity assistance.

The Export-Import Bank of Korea (Exim Bank) will expand policy loans for importers affected by the restrictions. It will also lower interest rates for conglomerates and SMEs.

State-run banks, including Exim and the Korea Development Bank, will also roll over maturing loans and extend import and export payment guarantees by one year for companies likely to be hit by the restrictions. This will apply not only for SMEs but also conglomerates.

Woori Bank has set aside 3 trillion won for loans to affected companies. It is also set to exempt key fees for companies dealing with materials and parts.

Shinhan Bank will offer new loans of up to 1 trillion won and lower loan interest rates by up to 1 percentage point.

NH Nonghyup Bank will extend loan installment payments for up to 12 months, and also lower interest rates for new loans or extended maturing debt by 0.3 percentage points.

Nonghyup is also reviewing assistance for farmers, as they could also become potential future targets.

KB Kookmin Bank said it would provide funds for businesses seeking loans, but did not state specific details.

They will get preferred rates for currency exchanges and also be exempt from fees relating to foreign exchange.

Meanwhile, Minister of Economy and Finance Hong Nam-ki will hold a meeting with related ministers on Japan's export restrictions at the Seoul Government Complex today.

They are set to discuss boosting the competitiveness of local materials and parts producers as a means to replace imports from Japan, and have each ministry come up with detailed plans.