Securities firms are struggling to control rising bad debts amid growing financial unrest prompted largely by the real estate downturn.
According to data from the Financial Supervisory Service, a group of 48 brokerage houses here assumed non-performing loans worth slightly over 3 trillion won ($2.3 billion) as of the end of March. This is a rise of around 13.7 percent in three months.
This was attributable to the sluggish performance of their real estate project financing business for the past year when the global economy entered a hawkish rate hike cycle. No more drastic rate hike is expected, but brokerages are maintaining their vigilance in dealing with the aftermath and tightening risk management.
