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Business Areas
Acquisition of NPLs
KAMCO fulfills its role as the safety-net of Korea by effectively disposing NPLs from financial institutions, corporations, households and the government.
Asian Financial Crisis and acquisition & resolution of NPLs
During the Asian Financial Crisis in 1997, KAMCO played a key role in overcoming the impasse by inputting KRW 39.2 trillion of public funds in order to acquire KRW 111.3 trillion of NPLs from financial institutions. With the primary objective of minimizing the burden of the public, NPLs that were purchased from financial institutions were promptly and efficiently resolved through management and operation of the NPL Resolution Fund, exceeding the recovery of the fund by KRW 4.3 trillion. This unique achievement in NPL disposition and restructuring has been presented as an international model for overcoming financial crises at the 2009 G20 Finance Ministers and Central Bank Governors meeting.
Constant restructuring support through KAMCO’s own account
After the expiration of the NPL Resolution Fund in Nov.2002, KAMCO has continued to acquire and resolve financial institution NPLs through its own account. In doing so, KAMCO supports the soundness of financial institutions by carrying out the role of a restructuring institution and supporting private credit recovery. At the end of 2008, as the insolvent PF loans of savings banks became a threat to the stability of the nation’s financial structure, KAMCO purchased KRW 500 billion PF loans and another KRW 1.2 trillion PF loans in March 2009. In total, KRW 1.7 trillion was proactively applied to the prevention of fiscal deterioration among financial institutions. In addition, KAMCO also continued to acquire household NPLs through its own account thus carrying on its role as a social safety net.
Installation and management of the Corporate Restructuring Fund as a proactive action
In 2009, as the default rate of financial institutions rose, the possibility of a massive NPL outbreak appeared. KAMCO realized that its own fund might not be enough to resolve the looming crisis and thus initiated the KRW 40 trillion Corporate Restructuring Fund to ward off the pending catastrophe. KAMCO terminated the Corporate Restructuring Fund on Dec. 31, 2014, which had been managed for 5 years, and reverted remaining assets to the National Treasury.
KAMCO's role in the NPL market
During times of crises, KAMCO prevents the spread of the crises through prompt, large-scale acquisition of NPLs.
When the economy is stable, KAMCO acquires the NPLs that are not resolved in the market and supports the credit recovery of the debtors.