Financial Supervisory Service Governor Lee Chan-jin said on the 4th that as savings banks' soundness is gradually stabilizing, now is the time to return to their original role as solid partners supporting low-income people, small and midsize businesses, and local economies.
At a roundtable with savings bank chief executive officers (CEOs) held at the Korea Federation of Savings Banks in Mapo District, Seoul, that day, Lee stated accordingly that it is fortunate to see delinquency rates calming as the sector actively works to resolve distressed project financing (PF; project financing). The PF delinquency rate at savings banks fell to 6.07% at the end of December last year from 6.55% at the end of 2023.
Lee said, please develop a win-win model in which local economies grow together by supplying needed funds in a timely manner to low-income people and local small merchants and small and midsize businesses, and pledged regulatory rationalization that provides expanded incentives for mid-rate loans to mid- and low-credit borrowers and incentives in the loan-to-deposit ratio calculation for loans made outside the Seoul metropolitan area.
Noting that a responsibility map will be introduced to the savings bank sector this year, Lee urged, build a customized internal control system that fits each savings bank's business structure and organization, and complete an effective responsible management model. Savings banks with total assets of 700 billion won or more must submit a responsibility map by Jul. 2.
Savings bank CEOs attending the roundtable that day said management burdens are growing due to a slowdown in local economies and changes in the business and regulatory environment, and requested policy support from the financial authorities.