The 28th-ranked Sangsangin Plus Savings Bank in the savings bank industry received an administrative sanction for timely corrective action from financial authorities. This was due to a significant deterioration in soundness caused by issues in real estate project financing.
On the 25th, the Financial Services Commission held a regular meeting and decided to impose a second phase of management improvement requirements for timely corrective action on Sangsangin Plus Savings Bank. Timely corrective action is an administrative measure taken by the Financial Services Commission when a financial institution does not meet the soundness standards set by financial authorities. According to the savings bank supervision regulations, if the comprehensive evaluation rating of management condition is grade 3 or if the evaluation rating for asset soundness or capital adequacy is grade 4 or below, the financial authorities can impose timely corrective action.
As of the end of March, the arrears rate for Sangsangin Plus Savings Bank was 21.3%, and the ratio of non-performing assets, which indicates the fixed assets in arrears, was 24.7%. The average arrears rate for savings banks was 9.0%, and the ratio of non-performing assets was 10.6%.
In accordance with the management improvement requirements, Sangsangin Plus Savings Bank will receive measures such as capital increase, disposal of non-performing assets, and restrictions on holding risky assets. The compliance period for these measures is 12 months. However, measures such as business suspension or forced restructuring were not imposed.
Timely corrective action for Union Savings Bank, which was also under the corrective action measure alongside Sangsangin Plus Savings Bank, has been deferred. The Financial Services Commission noted that Union Savings Bank actively arranged its non-performing real estate project financing assets to enhance soundness and decided to defer the timely corrective action.
Thus, the timely corrective actions for savings banks that have continued since last year have been concluded. The Financial Services Commission provided management improvement recommendations to Anguk and Raon Savings Banks in December last year and to Sangsangin Savings Bank in March this year. The Financial Services Commission stated that there are no additional targets for management condition evaluations at this time.
Meanwhile, a representative of Sangsangin Plus Savings Bank said, "Under the guidance of financial authorities, achievements in soundness management are being realized," adding, "There are no issues with asset soundness as the BIS ratio is above 10%."