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[Alpha Biz=(Chicago) Reporter Kim Jisun] MBK Partners, South Korea's largest private equity fund (PEF) operator, has taken preemptive risk management to resell Lotte Card.
According to the investment banking (IB) industry on the 11th, the real estate PF balance of Lotte Card, whose major shareholder is MBK Partners, was 1.3967 trillion won, down 9.76% (151 billion won) from the end of March. PF's share of total assets, including credit card sales, also fell from 7.5 percent to 6.5 percent over the same period.
Lotte Card has been steadily increasing related loans since it started real estate PF worth about 220 billion won in 2020. At the end of last year, the size grew to KRW 1.5686 trillion. However, real estate PF management is relatively good. Lotte Card's PF delinquency rate is around 1%. Bridge Loan, a de facto credit loan borrowed by the developer before receiving the Bon PF’ from the bank, is worth only 200 billion won and BonPF is more than 1 trillion won.
However, as the market interest rate rose and the possibility of real estate PF insolvency was highlighted, the Korean Federation of Community Credit Cooperatives took quick action. In fact, there have been claims inside and outside the financial sector that the rapidly increasing real estate PF is a factor in lowering Lotte Card's ransom. Lotte Card has also suggested real estate PF as an investment risk factor every time it prints a card bond this year.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
