Seven Domestic General Finance Companies Running Deficits

More than half of all domestic general finance companies are estimated to be running deficits.
According to results of business operation of general finance companies as of the end of March, released by the Financial Supervisory Commission (FSC), 7 out of the 11 general finance companies operating in Korea are currently showing deficits.
These companies included Nara, LG, and Youngnam but not Daehan General Finance, which on Friday had its normal business operations suspended for three months.
Nara General Finance, the largest of the 11 companies, is suffering a deficit of 162.3 billion won (about 120 million dollars), while the second largest firm, LG, had a deficit of 146.5 billion won (about 110 milion dollars).
Younnam and Joongang recorded 57.5 billion won and 41.9 billion won in losses, respectively.
The FSC stated that the 11 general finance companies had amassed a total deficit of 402.4 billion won because of insolvent debts accrued by Kia and Halla groups. However, their losses were partly mitigated as a result of increased profits in the stock and bond markets stemming from the improvement of the Korean stock market and low interest rates.
The total sum of deficits actually decreased 196.9 billion won from that of last year. These companies are estimated to be recording BIS capital-adequacy ratios between 8 to 11 percent.
Jangsoo Seo:jsbee@joongang.co.kr