Lee Bok-hyun, head of the Financial Supervisory Service, said on the 9th that financial institutions need to understand the industrial structure of the defense and shipbuilding sectors and establish a system to provide stable funding.
On this day, Lee attended the 'Gyeongnam core industry rebound support agreement ceremony' held at K Shipbuilding in Changwon, Gyeongnam, and noted, "As uncertainties in the trade environment have increased due to the mutual tariff measures imposed by the United States, concerns are growing about the difficulties faced by exporting companies directly affected and their related partner companies."
Lee stated, "In order to wisely overcome obstacles, the financial authorities are concentrating all possible capabilities, and a proactive and voluntary support from the financial sector is necessary," and added, "First, a constant liquidity support system is needed."
He continued, "The defense and shipbuilding sector is a long-cycle industry that takes a long time from contracting to payment receipt," and emphasized, "Financial institutions need to establish a system that can provide stable funding in a timely manner based on an understanding of this industrial structure."
Additionally, he emphasized, "The defense and shipbuilding sectors are industries where not only primary contractors but also secondary and tertiary partner companies are organically connected," and stated, "Financial institutions should induce prompt payment from primary contractors so that the flow of the funds they support can be smoothly connected to partner companies, and establish a detailed financial support system that can encompass the industrial value chain."
At the agreement ceremony, issues faced by partner companies in the defense and shipbuilding sectors, which are experiencing difficulties due to mutual tariff imposition shocks, were heard, and financial support measures such as issuing refund guarantees and expanding liquidity were discussed with local governments and regional financial institutions.
An RG is a guarantee that a shipbuilding company will repay the advance payment made by the ship owner if it is unable to deliver the ship to the ship owner after signing a contract. It has been pointed out that commercial banks mainly issue RGs only to large shipbuilding companies, causing small and medium-sized shipbuilders to have difficulties in receiving orders.
On this day, partner companies in the defense and shipbuilding sectors proposed expanding RG limits to strengthen their business competitiveness. In response, Gyeongnam Bank agreed to expand the RG limit for medium-sized shipbuilders and plan to increase liquidity support, including interest rate preferential treatment for defense and shipbuilding companies, from 580 billion won to 780 billion won.
Lee stated, "I believe that Gyeongnam Bank's decision to expand the RG issuance limit and significantly increase the existing liquidity support limit for small and medium-sized enterprises is a very timely measure."