‘NPL Market Settlement and Outlook Seminar’
Jointly Hosted with K-Clavis Asset Management
Samil PwC announced on the 23rd that "the previous day, it jointly held the 'NPL Market Settlement and Outlook Seminar' with K-Clavis Asset Management at Conrad Seoul in Yeouido, Seoul, to review and forecast the non-performing loan (NPL) market." This seminar was the first of its kind in the NPL industry, attended by over 50 representatives from 15 institutions including regional banks, the National Mutual Savings Banks Federation, and Korea Asset Management Corporation.
The seminar consisted of three sessions. Myung Bon-ho, Head of Samil PwC NPL Center (Partner), and Kim Hyo-gun, Head of PF Normalization Center (Partner), presented on the topics of the "NPL Market" and "Real Estate PF Trends," respectively, while Kim Sun-min, Head of K-Clavis Asset Management, spoke on "NPL Market Outlook and Response Strategies."
Myung Bon-ho, Head of Samil PwC NPL Center, is giving a presentation on the trends of the NPL market at the 'NPL Market Review and Outlook Seminar' held on the 22nd at Conrad Seoul in Yeouido, Seoul. Photo by Samil PwC
In the first session, Myung Bon-ho, Head of Samil PwC NPL Center, presented on NPL market trends. He stated, "Despite the surge in sales volume last year, there was no significant entry of new investors into the market," and emphasized, "The regularization of NPL sales by mutual finance institutions should be established to induce new long-term investors and expand the market's acquisition capacity."
Myung stressed, "For mutual finance institutions to stably manage the ratio of non-performing loans in the future, the public sale market for their NPLs must be operated regularly and continuously like the primary financial sector. Especially during periods when NPLs decrease in the primary financial sector, this will serve as a good investment alternative for investors."
In the second session, Kim Sun-min, Head of K-Clavis Asset Management, proposed a private bad bank model through a fund to effectively resolve NPLs of regional banks and mutual finance institutions. This fund is seeded by policy institutions like Korea Asset Management Corporation and capital contributions from each regional bank and the National Mutual Savings Banks Federation.
Kim explained, "This fund can act as a bad bank similar to UAMCO, which is capitalized by commercial banks. Through this, regional banks and mutual finance institutions can secure channels to effectively sell NPLs, and from an investment perspective, NPLs whose transaction prices have declined due to current supply-demand imbalances can become excellent alternative investment assets."
In the third session, Kim Hyo-gun, Head of Samil PwC PF Normalization Center, presented on trends in the real estate project financing (PF) market, analyzing key indicators related to real estate PF by comparing them with past savings bank crises. He also explained recent changes in market structure and business profitability, related government policies, and provided forecasts for this year's real estate PF market.
Kim said, "Thanks to the efforts of government authorities and financial institutions, the normalization of PF projects is progressing gradually, but the normalization of projects located in regional areas appears to be slower. This year calls for more active policies and market participation to normalize regional projects."
Meanwhile, Samil PwC’s NPL Center and PF Normalization Center cooperated to be selected last year as the advisory firm for NPL sales for all mutual finance institutions in Korea. K-Clavis Asset Management was selected at the end of last year by Korea Asset Management Corporation as the entrusted fund manager for the NPL fund acquiring NPLs held by regional banks.
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