President Lee praises financial commission's inclusive finance achievements
President Lee Jae-myung publicly commended the financial commission's achievements in inclusive finance as "remarkable" during a cabinet meeting. This praise follows a shift in how banks manage delinquent loans, moving away from selling them to external collection agencies and instead focusing on internal debt restructuring and loan forgiveness to support borrowers' recovery.
According to documents obtained by Aju Economy, self-managed debt restructuring by the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) increased from 989 cases in the first quarter of 2025 to 3,456 cases in the fourth quarter of the same year, a rise of approximately 3.5 times. In contrast, the sale of delinquent loans plummeted from 35,000 cases in 2025 to just 11 cases in the first quarter of 2026. The financial commission views this as a transition from a focus on maximizing recoveries to one centered on recovery and coexistence.
Historically, the financial sector has typically sold long-term delinquent loans to external collection agencies. While this allowed financial institutions to remove bad debts from their books, it often left borrowers facing prolonged collection pressures.
Blue House condemns attack on Namwoo ship, identifies perpetrators
"Our government firmly believes that attacks on private vessels like the Namwoo cannot be justified or tolerated," said a Blue House official. The government is taking a cautious approach regarding the identity of the attackers.
National Security Office Director Wi Seong-rak made these remarks during a press briefing, stating, "We strongly condemn this attack." He added that while it is clear that attacks on commercial vessels warrant condemnation, the government is not currently identifying the perpetrators and is in the process of gathering information.
On May 4, an explosion and fire occurred on the South Korean cargo ship HMM Namwoo, which was anchored in the Strait of Hormuz. Wi noted that two unidentified flying objects struck the ship's stern at one-minute intervals, causing flames and smoke. He explained that given the damage pattern and the height of the damage above sea level, the likelihood of a mine or torpedo attack appears low.
Growing financial support for vulnerable borrowers raises concerns
As inclusive finance expands within the banking sector, the scale of support for vulnerable borrowers is increasing. However, this growth also raises concerns about the financial burden on institutions. While there is consensus on the need to support vulnerable groups, there are fears that the performance metrics for inclusive finance may become a new standard for supervision and evaluation.On May 11, President Lee Jae-myung asked Financial Services Commission Chairman Lee Ok-keun during a cabinet meeting if there were ways to evaluate the implementation of inclusive finance and provide benefits or penalties, suggesting that the current system relies heavily on the goodwill of financial institutions.
This comment hints at the possibility of incorporating the performance of inclusive finance for low-to-middle credit borrowers into the evaluation and management guidelines for financial institutions, which has been interpreted as a signal that it could go beyond mere recommendations and influence future supervisory and evaluation frameworks.
Banks are already investing significant resources to expand support for vulnerable borrowers. The scale of long-term delinquent loan forgiveness and policy-driven financial support is also on the rise. This year, the total amount of long-term uncollected special bonds scheduled for forgiveness is estimated at 335.1 billion won, with Shinhan Bank accounting for the largest share at 269.4 billion won, followed by KB Kookmin Bank (33.5 billion won) and Woori Bank (32.2 billion won).
Kakao shareholders frustrated over union bonus demands amid stock decline
The Kakao union, which recently reported record earnings, is set to demand performance bonuses and may take collective action. This comes amid rising tensions following the Samsung Electronics union's call for a 10% performance bonus based on operating profit. However, unlike Samsung Electronics, which has seen its stock price reach all-time highs, Kakao's stock has been struggling, raising concerns that the company is prioritizing compensation demands over enhancing corporate value.
On May 11, the KOSPI index surpassed 7,800, approaching the 8,000 mark, while Kakao's stock price has been moving between a high of 50,600 won and a low of 45,250 won. Despite reporting record earnings in the first quarter, Kakao's stock price fell on the same day.
The ongoing decline in Kakao's stock price is attributed to uncertainties regarding its future growth potential. Although the company achieved record earnings in the first quarter, this improvement was largely due to restructuring effects rather than growth in its core business. The exclusion of Kakao Games and Kakao Healthcare from consolidated results has also contributed to the improved profit structure. Despite the performance improvement, concerns about slowing growth, uncertainties surrounding its artificial intelligence strategy, and underperformance in its content business continue to dampen market expectations.
* This article has been translated by AI.
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