The value of Japanese savings banks’ outstanding loans accounted for a 18.5 percent of total loans extended by South Korea’s savings bank industry. (image: Korea Bizwire)
SEOUL, Jul. 29 (Korea Bizwire) — South Korea’s financial watchdog said Monday that there will be limited impact if Japanese savings banks operating here scale back their exposure amid an escalating trade row between the two nations.
The value of outstanding loans extended by four Japanese savings banks in South Korea, including SBI Savings Bank and JT Chinae Savings Bank, stood at 11 trillion won (US$9.3 billion) at the end of March, the Financial Supervisory Service (FSS) said in a statement.
The value of Japanese savings banks’ outstanding loans accounted for a 18.5 percent of total loans extended by South Korea’s savings bank industry, the FSS said.
“The possibility of a rapid scaling back of operations by Japanese savings banks is seen as low,” because they have raised most of their funds in South Korea, the FSS said.
The Japanese savings banks are also unlikely to reduce their capital bases or sell a majority stake in the banks due to local regulatory hurdles, the FSS said.
South Korea’s financial authorities have said the possibility is low that Japanese lenders would withdraw part of loans extended to South Korean companies in another retaliatory act against Seoul.
But, they said authorities have been closely watching market situations in case of any contingency.
On July 4, Japan tightened controls on exports of key high-tech materials to South Korea, in apparent retaliation for a series of South Korean court rulings last year over Japan’s wartime forced labor.
Defying warnings by South Korea, Japan is moving to impose more trade restrictions by removing South Korea from a “white list” of trusted importers.
If South Korea is removed from the list of streamlined and preferential export destinations, it would have major impact on global supply chains, analysts said.
(Yonhap)
