The Financial Supervisory Service said on the 19th that the balance of overseas real estate alternative investments in the financial sector totaled 54.5 trillion won as of the end of June this year. That was down 1 trillion won from the previous quarter and was equivalent to 0.7% of the financial sector's total assets (7,488.3 trillion won).
By sector, insurers accounted for the largest share at 30.4 trillion won (55.7%), followed by banks at 11.4 trillion won (21.0%), securities at 7.3 trillion won (13.4%), mutual finance institutions at 3.4 trillion won (6.2%), specialized credit finance companies at 1.9 trillion won (3.6%), and savings banks at 0.1 trillion won (0.2%). As a share of total assets, overseas real estate alternative investments were highest for insurers at 2.3%, followed by securities at 0.9%, mutual finance institutions and specialized credit finance companies at 0.4% each, banks at 0.3%, and savings banks at 0.1%.
By region, investments in North America amounted to 33.6 trillion won, accounting for 61.6% of the total and the largest share. Europe followed with 10.2 trillion won (18.7%), Asia with 3.5 trillion won (6.4%), and other and multiple regions with 7.3 trillion won (13.4%).
By maturity structure, amounts maturing through 2025 totaled 4.3 trillion won, or just 7.8% of the total. Amounts maturing through 2030 came to 37.7 trillion won, or 69.2% of the total, indicating a structure with a high share of medium- to long-term maturities.
In terms of asset soundness, as of the end of the first half of this year, events of default (EOD) occurred in 2.07 trillion won (6.56%) out of 31.6 trillion won in overseas real estate alternative investments at single business sites by financial companies. This decreased from the previous quarter due to preemptive loss recognition and EOD resolutions. The EOD amount fell from 2.59 trillion won at the end of 2024 to 2.49 trillion won at the end of March 2025 and 2.07 trillion won at the end of June.
By asset type, EODs in office assets were the largest at 380 billion won, and 1.49 trillion won occurred in other types such as mixed-use facilities. For mixed-use facilities, the EOD ratio relative to the investment size was relatively high at 41.41%.
Although domestic financial companies' exposure to the office institutional sector is relatively high, the investment size relative to total assets is limited and capital buffers are sufficient, so the possibility of it spreading into a system risk was assessed as low. As of the first half of 2025, banks' BIS total capital ratio was 17.04%, insurers' risk-based capital ratio was 206.8%, and securities companies' net capital ratio was 835.6%.
Financial authorities plan to soon finalize revisions to best practice standards for risk management to strengthen internal controls related to financial companies' alternative investment operations. Revisions have been completed for the financial investment sector (March), insurance sector (May), and savings banks (November), while the banking, mutual finance institutions, and specialized credit finance company sectors are undergoing revisions.