SEOUL, The head of the financial regulator on Tuesday called for financial firms to swiftly address credit risks stemmed from real estate project financing.
Lee Bok-hyun, governor of the Financial Supervisory Service (FSS), also urged financial firms to secure funds to absorb potential losses from such short-term loans if their projects fail.
Loans involving real estate projects emerged as a major risk factor for the financial sector after Taeyoung Engineering and Construction Co., the country’s 16th-largest builder, filed for a debt restructuring program late last year.
The delinquency rate on project financing (PF) loans has more than doubled to 2.42 percent as of end-September from 1.19 percent at end-2022, according to the FSS.
The FSS will inspect all financial firms to check their debt loss reserves and see if they have used excessive amounts of profits from last year to pay out dividends while ignoring their potential loss from PF loans and failing to boost their reserves, it said.
Source: Yonha
p News Agency