Financial Services Commission Recommends Anguk and Raon Savings Bank to Improve Management

Financial authorities have imposed management improvement recommendations on Anguk and Raon savings banks.

The Financial Services Commission held a regular meeting today (24th) and said it recommended these two savings banks to improve their management, the lowest level of timely corrective measures.

It is the first time in six years that savings banks have been given timely corrective measures since January 2018.

The move was made to proactively encourage savings banks, whose soundness indicators have temporarily deteriorated in real estate project financing and PF normalization processes, to strengthen asset soundness management.

Specifically, it recommends the disposal of insolvent assets, an increase in capital, and restrictions on dividends, but does not include business-related measures.

As a result, the savings banks will be able to operate normally for six months during the implementation period of the measures, so there will be no inconvenience to consumers.

The Financial Services Commission explained that if the management status is recognized to have improved enough, it will finish the measure after a resolution even before the implementation period has passed.

Meanwhile, the move has drawn a line over concerns that the crisis will spread across savings banks and the past savings bank crisis will be repeated.

In the past, the savings bank crisis emphasized that the management situation, such as the moral hazard of major shareholders and poor ability to absorb losses, was coupled with the decline in the real estate market, and that it is different from now.

He added that the possibility of a repeat of the past is very limited as the ability to absorb losses, as well as the level of asset soundness and the ability to respond to crises has been strengthened due to improved soundness and governance.