Forecasted Savings Bank Special Account Loan Balance 7.2 Trillion Won...1.4 Trillion Won Decrease

Publication of the Special Account Management White Paper on Mutual Savings Bank Restructuring

As of the end of last year, the outstanding loan balance of the Mutual Savings Bank Restructuring Special Account (Special Account) decreased by approximately 1.4 trillion KRW compared to the previous year, totaling 7.2 trillion KRW.

The Korea Deposit Insurance Corporation (KDIC) announced on the 29th that it published the "2023 Mutual Savings Bank Restructuring Special Account Management White Paper," which contains this information. The Special Account refers to the account established within the Deposit Insurance Fund in 2011 to resolve insolvent savings banks during the savings bank crisis.

KDIC raised 27.2 trillion KRW through the Special Account to support the restructuring of 31 insolvent savings banks that occurred in 2011. Since then, using recovered funds and deposit insurance premium income, a total of 20 trillion KRW has been repaid, resulting in the Special Account debt at the end of last year decreasing by 1.4 trillion KRW from the previous year to 7.2 trillion KRW.

In particular, despite the challenging asset sales environment last year due to interest rate hikes and a sluggish real estate market, KDIC succeeded in selling long-term non-performing project financing (PF) assets through customized promotions such as producing drone promotional videos and one-on-one interviews with prospective buyers. Representative cases include the Oncheon Resort in Yangpyeong-gun, Gyeonggi Province (10.3 billion KRW) and the Automobile Driving Academy in Yangsan-si, Gyeongsangnam-do (8.2 billion KRW), with a total of 12 PF assets sold for 48.9 billion KRW.

Additionally, over the past year, debt adjustments were carried out for about 10,000 debtors, mainly low-income and vulnerable groups, effectively recovering long-term delinquent loans while providing opportunities for economic self-sufficiency.

KDIC stated, "The Corporation plans to accelerate the recovery of funds supporting insolvent savings banks until the Special Account operation deadline at the end of 2026," adding, "Through the operation of an incentive-compatible deposit insurance system that induces financial companies’ autonomous risk management, we plan to strengthen the preemptive prevention function of financial company insolvency, which is a key goal of Deposit Insurance 3.0."