FSS reports $9.5 billion in debt restructuring
According to the financial watchdog, of the household loans that entered a government-initiated pre-workout program, 9.4 trillion won are mortgage loans and 956.4 billion won are unsecured loans. The program was designed to help delinquent borrowers up to three months behind in their payments by allowing them to extend their time to repay and reduce interest rates.
The FSS said banks have facilitated 46.2 percent of pre-workout mortgage loans by extending the state deferment period followed delaying repayment of loans that exceed the 60 percent limit of loan to value ratio (30.4 percent), altering repayment options (18.1 percent) and extending installment repayment deadlines (4.9 percent).
The data showed that banks delayed interest payments for only 0.2 percent, or 16.2 billion won, of household loans and lowered interest rates for only 0.1 percent, or 10.8 billion won.
KB Kookmin Bank facilitated the largest amount of household loans under the debt-rescheduling plan (2.93 trillion won), followed by Shinhan Bank (1.99 trillion won), Nonghyup Bank (1.18 trillion won), Industrial Bank of Korea (1.09 trillion won), Hana Bank (847.9 billion won) and Korea Exchange Bank (492.9 billion won).
Two foreign banks - Standard Chartered Korea and Citi Bank - ranked at the bottom, placing 422.5 billion won and 211.2 billion won of household loans under debt-restructuring.
“The FSS will encourage each bank to develop and nurture the current debt-restructuring plan tailored to each borrower’s condition, and it will review banks’ performance on a quarterly basis,” said Cho Sung-min, an FSS official. “Measures for supporting socially vulnerable classes, including the pre-workout program, will be included as a criterion when the FSS evaluates banks’ corporate social responsibility scores.”
By Kim Mi-ju [email@example.com]