(From left) NH NongHyup Financial Group Chairman Kim Kwang-soo, Hana Financial Group Chairman Kim Jung-tai, Woori Financial Group Chairman Sohn Tae-seung, KB Financial Group Chairman Yoon Jong-kyoo, Shinhan Financial Group Chairman Cho Yong-byoung. (Yonhap)
Financial Services Commission Eun Sung-soo will attend a closed-door meeting of the heads of South Korea’s five biggest banking groups Friday to discuss whether to further ease loan repayment schedules for coronavirus-battered companies, industry sources said Sunday.
It is unusual for the FSC chief to attend the meeting convened by the five chiefs, according to insiders.
Through the meeting, the authorities are slated to seek a consensus on the details of a further extension of loan repayment moratoriums that are due on Sept. 30.
Earlier in April, responding to the FSC guidance, local financial groups embarked on a six-month extension of loan maturity for cash-strapped families as well as small and medium-sized firms, while suspending loan interest payments for SMEs. The amount of loan repayments that have been extended so far is estimated at some 63 trillion won ($52.35 billion), according to the FSC.
As the COVID-19 outbreak prolongs, public pressure has been mounting on further extension of loan maturities, while local lenders are expressing worries over their fiscal soundness.
“Local banks have stepped up efforts to help low income households and struggling companies to counter the pandemic, partnering with the government officials, but continuous and unconditional loan extensions will lead to a surge in loan requests and bad loans, taking a toll on the banks’ financial stability,” an official said.
The five chiefs -- KB Financial Group Chairman Yoon Jong-kyoo, Shinhan Financial Group Chairman Cho Yong-byoung, Woori Financial Group Chairman Sohn Tae-seung and Hana Financial Group Chairman Kim Jung-tai as well as NH NongHyup Financial Group Chairman Kim Kwang-soo -- are set to attend the meeting.
By Choi Jae-hee (email@example.com