According to financial sources on June 5, the Financial Services Commission has mandated that banks incorporate companies' serious accident histories into their credit evaluations starting this year.
This move follows President Yoon Suk Yeol's stern criticism of POSCO E&C last year after a fatal accident, where he called for restrictions on bank loans to such companies.
As a result, Hanwha Aerospace's explosion incident at its Daejeon facility is being closely watched as it may be the first instance of credit restrictions in the financial sector. The company's short-term borrowings reached 6.89 trillion won in the first quarter of this year, with approximately 5.75 trillion won, or 83%, sourced from domestic banks. KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NH Nonghyup Bank, Industrial Bank of Korea, Export-Import Bank of Korea, Busan Bank, and iM Bank have all provided operational and facility funding to Hanwha Aerospace. The long-term borrowings from these banks amount to about 3.60 trillion won.
While there has not yet been an administrative or judicial ruling regarding Hanwha Aerospace, creditor banks are closely monitoring the circumstances of the incident and any potential legal liabilities.
Banks evaluate loans based on both financial and non-financial factors. Although financial metrics typically carry more weight, the increasing emphasis on environmental, social, and governance (ESG) management has led to a growing importance of non-financial assessments. In particular, following President Yoon's strong demand for financial penalties against companies involved in accidents last year, banks are now scrutinizing Hanwha Aerospace's serious accident record.
If Hanwha Aerospace is classified as a company violating the Serious Accident Punishment Act, it could face stricter loan evaluations, reductions in existing credit limits, more stringent assessments for loan extensions, and adjustments to interest rates.
A financial industry insider noted, "While we must consider financial factors, we cannot immediately recall loans. However, the non-financial assessment could negatively impact their evaluation. If it becomes clear that the plant has experienced frequent accidents and safety inspections have not been properly conducted, there could be a downgrade in credit ratings, potentially leading to loan recalls in the worst-case scenario."
However, there are few precedents for applying the financial penalties under the Serious Accident Punishment Act to large corporations, making this incident a critical test of the effectiveness of the regulations.
Another financial industry source stated, "If we were to hastily recall loans, it could threaten the survival of our partner companies. We will carefully consider the severity of the situation and the potential for improvement while strengthening our credit evaluations."
A representative from the financial authorities remarked, "Once a serious accident is confirmed, the banks' credit evaluations should be tightened."
* This article has been translated by AI.
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