South Korean Financial Companies' Overseas Property Holdings Reach 56 Trillion Won

South Korean financial companies have amassed a staggering 56 trillion won (approximately $41.26 billion) in overseas real-estate alternative investments. However, events of default (EOD) have been triggered on 7.6 percent of these assets, raising concerns among financial authorities.

Regional and Institutional Breakdown of Investments

Insurers lead the pack with 30.1 trillion won, or 53.8 percent of the total, followed by banks, securities firms, and mutual-finance institutions. Geographically, North America dominates with 35 trillion won, or 62.5 percent, while Europe and Asia hold smaller shares.

Risks and Responses

With office properties showing high vacancy rates, especially in North America at 20.4 percent, the Financial Supervisory Service (FSS) is stepping up supervision. Despite these challenges, the sector's capital-adequacy ratios remain robust, minimizing systemic risks.

The FSS plans to enhance risk management guidelines by the third quarter of this year, focusing on appraisals and loss recognition for office assets.