The National Federation of Community Credit Cooperatives announced on the 3rd that it has completed the merger of a total of 24 credit unions as part of its innovation efforts concerning community credit cooperatives, following a withdrawal incident that occurred in July 2023.
The National Federation of Community Credit Cooperatives is establishing a new Credit Improvement Headquarters in 2024 to select merger target credit unions based on capital adequacy and asset soundness, and is pushing for mergers with nearby sound credit unions after compensating the losses of the targeted credit unions through the Deposits Protection Fund.
Additionally, credit unions that do not qualify for the merger are also pursuing voluntary mergers based on mutual agreement. Voluntary mergers are part of a strategy to provide stable financial services in the region and promote sustainable growth. Since July 2023, six credit unions have conducted voluntary mergers to secure soundness and enhance management efficiency.
The management rationalization work of community credit cooperatives is a project aimed at stabilizing management through financial structure improvement and mergers targeting at-risk credit unions, with the ultimate goal of safely protecting customers' investments and deposits. As concerns over credit union insolvency have increased, the National Federation of Community Credit Cooperatives is actively reviewing merger conditions and supporting the Deposits Protection Fund to facilitate smooth mergers among credit unions.
Moreover, to prevent any damage and inconvenience to customers due to mergers, it is the principle that the credit unions targeted for mergers will operate as branches of the new credit union. The National Federation of Community Credit Cooperatives explained that deposits and investments exceeding 50 million won from customers of the targeted credit unions will be fully transferred to the new credit union, ensuring their safety.
Kim In, the chairman of the National Federation of Community Credit Cooperatives, said, “Even if the number of corporations decreases due to mergers and management rationalization, we will maintain the total number of branches to fulfill our social responsibility as a financial institution providing financial services to underserved areas.”