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Industry Report

Industry reports, briefs issued by Samsung Economic Research Institute

Saving the Savings Banks

Saving the Savings Banks

PARK Hyun-Soo

Feb. 7, 2005

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The mutual savings banks have been a useful institution for small businesses in need of quick credit. They have also served the needs of low-income people who find the behemoths of regular commercial banks too prohibitive to deal with. And yet, these popular institutions are going through a rough patch nowadays. In January, the government's Financial Supervisory Service (FSS) ordered Seoul-based Han Jung Bank to suspend business for six months; its Bank of International Settlements (BIS) capital adequacy ratio was judged too low at -39.7%, and a half of its total exposures, and 90% of its small credits worth up to 3 million Won each, were found to be non-performing.


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