Financial authorities plan to begin management status evaluations of savings banks that were subject to prompt corrective action. The grace period for one institution was ended after authorities determined its management had normalized.
According to the financial sector on the 8th, the Financial Services Commission and the Financial Supervisory Service finished the grace period for prompt corrective action for SNT Savings Bank in Aug. The grace period for prompt corrective action allows a financially troubled company that submits a management improvement plan and has its self-rescue efforts recognized to have prompt corrective action deferred for a certain period.
SNT Savings Bank, which received a prompt corrective action grace period in Dec. last year, was found to have met criteria such as capital soundness in a management status evaluation after the three-month grace period. The grace period for prompt corrective action can be terminated through a report to the Financial Services Commission without a separate resolution process.
During the same period, financial authorities are also conducting management evaluations of Anguk Savings Bank and Raon Savings Bank, which received a management improvement recommendation as a prompt corrective action. If the evaluation finds that asset soundness, including the arrears ratio, has sufficiently improved, prompt corrective action can be terminated through a resolution by the Financial Services Commission.
As performance and soundness indicators such as the arrears rate improved for savings banks in the first half, most prompt corrective actions imposed on savings banks since last year are expected to be lifted.
As of the end of June this year, Anguk Savings Bank's ratio of substandard-and-below loans was 12.21%, down 18.81 percentage points from the same period a year earlier (31.02%). Its Bank for International Settlements (BIS) capital adequacy ratio also rose from 13.16% to 16.25% over the same period, indicating improved soundness metrics. Raon Savings Bank has been approved for sale to KBI Gukin Industry, an affiliate of KBI Group, and is expected to carry out normalization measures such as a paid-in capital increase and the disposal of nonperforming assets.
Sangsangin Savings Bank, which received a management improvement recommendation in Mar. this year; Pepper, Woori and Soulbrain Savings Bank, which received a prompt corrective action grace period; and Sangsangin Plus Savings Bank, which received a management improvement demand in Jun., will also have their management status evaluated within the year.
Among them, Sangsangin Savings Bank is undergoing a sale due to issues with the controlling shareholder suitability maintenance requirements of its largest shareholder, Sangsangin Group. After sale talks with OK Financial Group fell through, Sangsangin Savings Bank is reportedly negotiating with other potential buyers, including private equity funds.