MG Saemaul Geumgo’s bank run (large-scale deposit withdrawal) crisis was predicted when the real estate market began to stagnate last year. Saemaul Geumgo belatedly entered the highly competitive project financing ( PF ) market and paid out loans mainly to small local businesses. In addition, it is evaluated that ‘customer trust’, which is most important to financial companies, has been lost as moral hazard problems such as employee embezzlement overlap.
According to the financial sector on the 6th, Saemaul Geumgo unreasonably increased the size of real estate PF in a short period of time. After the insolvency of savings banks stabilized, Saemaul Geumgo jumped into the market as a latecomer, fascinated by the sight of some financial companies, centering on the securities industry, earning large sums of money based on real estate PF .
However, Saemaul Geumgo, which lacked real estate PF know-how and networking, pursued a strategy to focus on small businesses with loans of less than 50 billion won, such as officetels in the provinces, complex-type villas, and country houses, instead of grade-A businesses such as apartments in the metropolitan area . It has rapidly increased in a market that large securities companies are ignoring. As a result, the balance of loans to the construction and real estate industries of Saemaul Geumgo, which was only 27.2 trillion won at the end of 2019, more than doubled to 56.3 trillion won at the end of last year.
These B and C- class businesses fell first when the real estate market slumped. The delinquency rate of Saemaul Geumgo construction and real estate industry loans, which was only 2.5% at the end of 2019, soared to 4.1% at the end of 2021 and 7.7% at the end of last year. At the end of January this year, it soared to 9.2%. Loan arrears also surged by 900 billion won in one month from 4.3 trillion won at the end of last year to 5.2 trillion won at the end of January this year.
Saemaul Geumgo’s construction and real estate industry loan delinquency index is expected to get worse. This is because the maturities of many of the loans that went out to businesses whose construction has been delayed have been extended and are not currently reflected in the delinquency index. In fact, the officetel construction site of Dain Construction in Daegu, where 12 branches of Saemaeul Geumgo gave loans of nearly 300 billion won토토사이트, was delayed for nearly four years due to suspicions of fraudulent sales by the construction company and financial difficulties, but it is currently missing from the delinquency index.
Saemaul Geumgo had frequent corruption incidents due to the overlap of employee corruption and inexperienced management. According to the financial authorities, from 2017 to August 2022, there were 85 cases of embezzlement, breach of trust, fraud, and brokerage by Saemaul Geumgo employees, amounting to 64.1 billion won in damages. Of this, only 22.6 billion won, or 35%, was recovered. In June of last year, an embarrassing incident occurred in which a group of people who borrowed 38 billion won by deceiving Cubic as diamonds by colluding with Saemaul Geumgo employees were arrested, but the internal control system failed to filter it out.There are no suitable measures to prevent the bank run of Saemaul Geumgo. Regarding concerns about branch bankruptcy, the Ministry of Public Administration and Security and the Korea Federation of Community Credit Cooperatives announced, “If deposits and savings deposits that have been canceled midway are deposited again within two weeks, tax exemption benefits and the promised interest rate will be applied as they are.” This is the same countermeasure that was introduced in 2011 when the Saemaul Geumgo faced a bank run crisis.