Forecast: "8.5 Trillion Won Unrecovered from Funds Injected in Savings Bank Crisis"

"Preemptive Risk Assessment to Prevent Additional Failures in Savings Banks"

The Korea Deposit Insurance Corporation (KDIC) revealed that approximately 8.5 trillion KRW of the funds injected during the 2011 savings bank crisis remain unrecovered as of the end of last year.

KDIC stated this in the '2022 Mutual Savings Bank Restructuring Special Account Management White Paper' published on the 31st.

Previously, KDIC created a special account to restructure 31 insolvent savings banks that emerged after 2011, providing 27.2 trillion KRW in funds. Of this, a total of 18.7 trillion KRW had been repaid by last year through recovered funds and special account insurance premiums.

To recover funds, last year KDIC enhanced the efficiency of asset sales from bankruptcy estates by utilizing new non-face-to-face and contactless technologies through digital channels, established a new pool of sales agents, and explored new sales methods including introducing recovery approaches that stakeholders could agree upon.

Additionally, debt adjustments were carried out for about 11,000 individuals, mainly from low-income and vulnerable groups, efficiently recovering long-term delinquent claims that were difficult to collect in a manner suited to current realities, while providing debtors with opportunities for economic self-sufficiency.

KDIC stated, "Besides this, we selected savings banks with significant potential risk factors such as deteriorating debt repayment ability of households and businesses and insolvency in real estate project financing (PF), and conducted close monitoring to prevent insolvency," adding, "We plan to continue strengthening proactive risk management to prevent additional insolvency in savings banks and others."