The Korean Federation of Community Credit Cooperatives (KFCC) said on the 6th that its arrears rate fell to the 6% range in the third quarter this year. It said it aims to reduce the arrears rate to the 5% range by the end of the year and manage it stably.
Mutual finance institutions have recently faced overall difficulties due to a slump in the real estate and construction markets, deteriorating profitability and worsening arrears rates. The Korean Federation of Community Credit Cooperatives (KFCC) also saw its arrears rate rise to 6.81% at the end of last year and 8.37% in the first half of this year.
In response, the Korean Federation of Community Credit Cooperatives (KFCC) said it has been actively selling nonperforming loans this year and has significantly reduced the arrears rate, with the rate at the end of September coming in at 6.78%, a level similar to the end of the previous year, indicating a recovery in credit soundness.
The central federation has institutionalized an ongoing framework for the sale and resolution of nonperforming loans centered on MG AMCO, and established diverse channels for resolving bad debt, including KAMCO, asset securitization and NPL funds, laying a foundation for stable soundness management. It is also pushing ahead with nonperforming loan sales in the fourth quarter at the end of this year, with a goal of bringing the year-end arrears rate down to the 5% range.
Kim In, president of the Korean Federation of Community Credit Cooperatives (KFCC), said, "As a community finance institution, the Korean Federation of Community Credit Cooperatives (KFCC) is closely cooperating with the Ministry of the Interior and Safety to carry out fundamental structural improvements," adding, "There are many challenges in the process of selling nonperforming loans, but we will do our utmost to restore soundness as soon as possible and to normalize management."