Expanding Capacity to Purchase Non-Performing Loans
Accelerating Efforts to Improve Cooperative Delinquency Rates
The National Federation of Fisheries Cooperatives (Suhyup) will inject an additional 50 billion won into its subsidiary, Suhyup NPL Loan Company, to strengthen the resolution of non-performing loans (NPLs) at local fisheries cooperatives. The goal is to significantly expand the capacity for purchasing non-performing loans and to restore the asset soundness of the cooperatives at an early stage.
The National Federation of Fisheries Cooperatives announced on the 24th that it recently held a board meeting and approved a plan to make an additional capital injection of 50 billion won into Suhyup NPL Loan Company by the end of this month.
Suhyup NPL Loan Company is an institution that purchases and collects non-performing loans from 90 member cooperatives nationwide. It was established in October last year with a full capital injection of 50 billion won from the National Federation.
The Federation determined that securing additional funds for the early resolution of non-performing loans was inevitable, in line with the "Special Measures for Improving Delinquency Rates at Member Cooperatives" being implemented until the end of the year, and thus made this decision.
Suhyup NPL Loan Company, which completed registration as a loan business with the Financial Services Commission in March this year, has accelerated the normalization process by purchasing about 130 billion won worth of non-performing loans from cooperatives by the end of September. In addition, it has secured a credit line of 180 billion won from Suhyup Bank, securing funds for the purchase and management of non-performing loans. Through these measures, it has expanded its purchasing capacity and is focusing all efforts on resolving non-performing loans.
Separately from operating its NPL subsidiary, the National Federation of Fisheries Cooperatives has organized a total of 500 billion won worth of non-performing loans through the creation of its own NPL fund and by encouraging direct sales by cooperatives.
Institutional improvements to strengthen asset soundness are also underway. In the second half of last year, the Federation introduced a new support system allowing cooperatives to participate in loans to high-quality borrowers handled by both the Federation and Suhyup Bank. Through this, loans amounting to 1 trillion won have been executed. For cooperatives with high delinquency rates, the Federation has further tightened the criteria for repayment ability when issuing new loans and has made it mandatory for the Federation’s loan review staff to conduct a preliminary review.
Roh Dongjin, Chairman of the National Federation of Fisheries Cooperatives, stated, "Resolving non-performing loans and securing high-quality assets are the first steps toward normalizing cooperative management," and added, "We will pursue long-term structural improvements to build management resilience that can withstand changes in the financial market environment."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
