OK Savings Bank Turns to Deficit After 7 Years... PF Delinquency Rate at 22.7%

OK Savings Bank announced on the 30th that its net loss for the second quarter of this year was 7.6 billion KRW, a decrease of 23.5 billion KRW compared to the same period last year. This is the first quarterly net loss for OK Savings Bank in 7 years and 6 months since the fourth quarter of 2016.

An OK Savings Bank official stated, "The loss for the quarter was recorded due to additional provisions for loan losses following the strengthened evaluation criteria for real estate project financing (PF) feasibility," adding, "However, cumulatively, we posted a profit of 7.3 billion KRW." As of the end of the first half of this year, the balance of loan loss provisions at OK Savings Bank stood at approximately 998.2 billion KRW.

The delinquency rate at the end of the first half of this year was 9.76%, up 0.89 percentage points from the previous quarter's 8.87%. Real estate PF loans rose nearly 1.5 times from 15.33% at the end of March to 22.71% at the end of June. The ratio of non-performing loans classified as substandard or below increased by 2.51 percentage points to 11.99%.

An OK Savings Bank representative explained, "The improvement in PF feasibility evaluation standards led to new defaults, causing the rise in delinquency rates in the real estate sector, which in turn affected the overall delinquency rate and the non-performing loan ratio." They added, "Due to domestic and external uncertainties, the repayment ability of our main customer base, including low-income earners and small business owners, has also deteriorated." The official further stated, "We are actively managing asset quality indicators by selling or transferring non-performing loans."