The Korea Asset Management Corporation (KAMCO)'s acquisition of non-performing loans in the second financial sector reached 308.6 billion won in the first half of the year. This is similar to the level of the annual non-performing loan acquisition in 2022. It is interpreted that the prolonged economic recession and the failure of real estate project financing (PF) have continued to create management difficulties in the second financial sector.
According to the data submitted by KAMCO to the People Power Party's lawmaker Yoon Han-hong on the 29th, the total amount of non-performing loans acquired by KAMCO from the second financial sector (insurance companies, mutual finance companies, credit finance companies, and savings banks) in the first half of this year was 308.6 billion won. This is similar to the annual acquisition amount in 2022 (355.9 billion won) and is nearly half of the total annual acquisition amount last year, which was 722 billion won. If this trend continues, it is estimated that KAMCO will acquire between 600 billion and 700 billion won in non-performing loans from the second financial sector this year.
KAMCO acquired non-performing loans in the range of 100 billion won each year in 2020 and 2021. Then, the acquisition amount rose to 355.9 billion won in 2022 and soared to 1.8725 trillion won in 2023. The year 2023 coincided with the realization of failures in real estate project financing, resulting in an influx of non-performing loans from mutual finance and the second financial sector.
KAMCO's financial burden is also increasing due to its large-scale acquisition of non-performing loans. KAMCO's debt ratio at the end of last year exceeded 200%. The debt ratio, which was 145.13% at the end of 2022, rose to 181.73% at the end of 2023 and reached 213.73% at the end of last year, increasing for two consecutive years. Typically, if the debt ratio exceeds 200%, the organization is designated as a financially risky public institution.
A KAMCO official noted, "The increase in non-performing loans has been driven by sluggish domestic demand due to COVID-19, continued interest rate hikes last year, and the real estate market recession, particularly in the second financial sector," adding that "as a result, KAMCO's acquisition scale is also on a steadily increasing trend."