 |
(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] Financial Supervisory Service Conducts On-Site Inspections of Securities Firms' Real Estate Project Financing (PF) Operations.
The Financial Supervisory Service is currently conducting on-site inspections to verify whether the business viability assessments of real estate project financing (PF) conducted by securities firms were appropriate.
According to financial authorities and the financial investment industry on the 17th, the Financial Supervisory Service visited the headquarters of Meritz Securities and Korea Investment Securities the previous day to conduct on-site inspections. They plan to review PF-related documents at the headquarters of Hi Investment Securities later this week.
This inspection follows the financial authorities' announcement in May of future policies aimed at ensuring orderly landing of real estate PFs. Authorities determined that evaluation criteria by financial institutions did not sufficiently reflect the characteristics and risks of PFs, prompting them to strengthen evaluation standards.
The scope of business viability assessments has been expanded to include existing PFs and bridge loans, as well as land collateral loans and debt guarantee agreements. Evaluation criteria, previously centered on core PFs, have been subdivided into core PFs and bridge loans, with grades divided into four stages from the previous three (stable, average, deterioration concerns) to include stable, average, significant, and concerns of insolvency.
The Financial Supervisory Service conducted on-site inspections to assess whether securities firms are adhering to enhanced business viability assessment standards.
However, it is unlikely that the investigation will expand to all securities firms. The focus is on sampling some companies to inspect the evaluation status of securities firms. There are currently no immediate plans to expand on-site inspections, according to the Financial Supervisory Service. As inspections have been conducted on non-banks before, the intention is to broadly examine the entire industry, including securities firms.
On the 11th, the Financial Supervisory Service conducted on-site inspections of central credit unions, savings banks, and capital companies. It is expected that after completing the industry-wide on-site inspections, the results of business viability assessments and the size of reserves will be finalized by the 26th.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
