SEOUL, Oct. 4 (Korea Bizwire) – The higher the demand for imported vehicles has soared up, the much greater the financial size of South Korea’s credit-specialized finance companies (CSFCs) for auto installment loans and facility leasing is for the first half of 2014.
According to the report from the Financial Supervisory Service in South Korea, the aggregate amount of auto installment loans from 61 CSFCs for the first half showed a sharp increase: it totaled approximately KRW5.7 trillion, up 56.7% or about KRW2.6 trillion from a year earlier, while the auto facility leases loans came to about KRW 3.5 trillion, up 19.2% or KRW569.5 billion. The increase in auto installment financing and auto facility leasing was mostly due to the increased sales of imported cars.
It also resulted in the increase of a total financial size of installment financing and facility leasing. New installment loans for the first half amounted to KRW6.3 trillion, up 51.1% or KRW2.1 trillion from a year earlier, while facility leasing loans came to KRW5.5 trillion, up 13.3% or KRW644.7 billion. The rates of auto loans in installment loans and leasing are 90% and 60%, respectively.
In contrast, the aggregate net income of the CSFCs for the first half totaled KRW478.3 billion, down 15.7% or KRW88.8 billion from a year earlier. The drop resulted mostly from a sharp decline in income from sale of tangible assets. Unlike the first half of 2013, in 2014 there was not such sale of massive tangible assets like the Hyundai Capital building.
At the end of June 2014, the aggregate assets of the 61 CSFCs came to KRW88.8 trillion, up 1.4% or KRW1.2 trillion from the end of 2013. This increase stemmed mostly from rises in inherent assets and business loans, according to FSS.
By Eugene Yu (email@example.com)