Public funds recovery rate growth loses steam
According to the Financial Services Commission, state-run entities including the Korea Deposit Insurance Corporation retrieved a total of 167 billion won ($158.7 million) from July through September, expanding the total amount of return since November 1997 to 106.1 trillion won. During that period, the government provided a combined 168.7 trillion won in public funding and 62.9 percent, or 106.1 trillion won, has been recouped.
The recovery rate in the third quarter increased 0.1 percentage point from 62.8 percent in the previous quarter, whereas the rate in the second quarter grew by 0.3 percentage point compared to the previous three months. This year’s recovery rate so far is lower than in previous years. The 62.9 percent recovery rate for the third quarter was a slight increase from 62.5 percent in December 2013. The rate was 0.9 percent for 2011. In previous years, the rate increased by more than 1 percentage point.
“The reason the recovery rate increased at a slower pace this year is because we have already sold, and therefore recouped, many large-scale funds through bids,” said an official from the FSC. “The only big one left in the process of privatization is the sale of Woori Financial Group.”
Meanwhile, the regulator said it has recouped 74.4 percent, or 4.58 trillion won, of its second batch of public funds created in 2009 to provide financial support to the financial sector by buying bad loans and assets following the global financial crisis. From June 2009 through September, the government injected 6.17 trillion won worth of public funds into the country’s financial system. In the third quarter, the government recouped 77.8 billion won.
BY LEE EUN-JOO [firstname.lastname@example.org]