Saemaul Geumgo announced on the 28th that it sold a total of 3.8 trillion won worth of non-performing loans in the first half of this year, effectively addressing potential instability factors and managing delinquency rates at an appropriate level. This represents a 90% increase compared to sales of approximately 2 trillion won in the first half of the previous year.
Additionally, to enhance risk management and loss absorption capability based on business evaluation, Saemaul Geumgo is continuously increasing the provision for loan loss reserves to prepare for potential losses. The loan loss reserves will serve as a buffer capital to cover potential future defaults and losses on loans.
Saemaul Geumgo is diversifying its delinquency management methods by discovering new channels for selling non-performing loans, such as its subsidiary MCI, Korea Asset Management Corporation (KAMCO), UAMCO, and asset securitization methods. In particular, the 'UAMCO-MG PF Normalization Fund' established in September of last year with a scale of 500 billion won has a cumulative investment commitment of 180 billion won and is being actively utilized to normalize distressed project finance business sites through restructuring.
Along with this, Saemaul Geumgo plans to more comprehensively and systematically resolve non-performing loans through the newly launched Saemaul Geumgo Asset Management Company (MG AMCO) in early July, thereby accelerating health management in the second half of the year.
Saemaul Geumgo Asset Management Company (MG AMCO) is a specialized subsidiary for purchasing Saemaul Geumgo's non-performing loans, playing a role in effectively supporting the prevention of insolvency and management improvement, as well as the resolution of non-performing loans. Saemaul Geumgo plans to push for bulk sales through MG AMCO every quarter this year.
As MG AMCO officially begins operations, it is expected to establish a comprehensive solution system for resolving non-performing loans that will cover functions from mainly selling loans to debt collection.
In July, Saemaul Geumgo opened the Saemaul Geumgo NPL information management system, gradually stepping up direct resolutions for distressed project finance business sites along with loan sales. The Saemaul Geumgo NPL information management system is a version of the project finance information disclosure platform operated by the Financial Supervisory Service in January, and it serves to promote sales by providing real-time information on PF business sites currently undergoing public and private auctions to potential buyers.
Currently, a special inspection (from July to September) being conducted by the Ministry of the Interior and Safety is taking place at over 100 Saemaul Geumgo locations, and Saemaul Geumgo is actively working to strengthen internal controls and eliminate financial accidents. In the event that serious financial accidents are detected during this process, they plan to implement 'one strike out' and take strict follow-up measures to restore customer trust.
Meanwhile, while Saemaul Geumgo puts forth efforts for health management in the second half of the year through new subsidiaries and the NPL system, it also plans to ensure that the health management does not undermine its role in providing financial support for the low-income population. It aims to gradually expand the scale of policy funds for small business owners and low-to-mid credit borrowers, continuously enhancing ways for Saemaul Geumgo to contribute to the community and strengthening its identity as a financial institution focused on the low-income sector.
Kim In, Chairman of the Saemaul Geumgo Central Association, said, 'Although the recovery delay in the real estate market and the resolution of project finance business sites are expected to lead to a difficult management environment for the next 1 to 2 years, we are concurrently promoting improvements in our structure and enhancing soundness under the guidance and cooperation of the Ministry of the Interior and Safety.' He also noted, 'We will work to reduce the scale of losses in order to normalize management as soon as possible and devise unprecedented various measures.'