KAMCO Establishes 410 Billion Won Fund to Address Local Bank Non-Performing Loans

KAMCO is establishing a fund worth 410 billion won to support local banks in addressing non-performing loans and improving asset soundness.

On June 19, KAMCO held a meeting at the Conrad Hotel in Yeouido, Seoul, with four local banks—Busan Bank, Gyeongnam Bank, Gwangju Bank, and Jeonbuk Bank—as well as iM Bank to mark the successful launch and operation of the "Local Bank Financial Stability Support Fund No. 2."

This new fund expands on the first fund established last year, with KAMCO committing 150 billion won as a cornerstone investment. Five banks are participating as joint investors, bringing the total fund size to 410 billion won. The fund will be managed by Aegis Asset Management.

The fund's resources will be used to proactively acquire and manage non-performing loans held by local banks. This initiative is expected to enhance the asset soundness of these banks and provide them with additional lending capacity, enabling stable financial support for struggling local small and medium-sized enterprises and households. Currently, most local banks have delinquency rates exceeding 1%.

KAMCO aims to support the healthy management of funds within local banks and facilitate smooth capital flow in the regional economy.

KAMCO President Jeong Jeong-hoon stated, "KAMCO has introduced various methods for handling non-performing loans tailored to the needs of financial institutions, thereby supporting improvements in asset soundness. We will continue to strengthen KAMCO's public functions to ensure that local banks can play a vital role as the core financial foundation of the regional economy."