Since Hyundai Motor announced they their sales sharply decreased by 75%
The default rate of Hyundai Motor’s cooperative companies has been increased up to 1.6% (this is 1.3 times bigger than whole loan volume – 1.1%)
Bank has an experience of too high allowance for bad debts when they loaned money to shipbuilding related companies in the past. So they act passively now but the chairman of finance committee asked bank “Do not take an umbrella when it rains.”
People who are responsible for loan in Korean bank claims that loan extension is not a radical solution for auto parts companies although they approves the extension because of government request. Bank loan department says that “loan extension” is just like maintenance and it doesn’t solve the current problem completely. Those people says : If there is no business profit, how they can approve the loan extension and how they can get money back?
According to Korea Bank research, the total loan of Automobile and Trailer industry is about 31,195.4 billion won( it’s about USD 27,451,952,000 ) It is increased by 30% in comparing with 5years-ago data (24,109.2 billion won)
IBK bank informed that current Probability of Default of auto parts companies is about 4.4% which is more than P.D. of Middle-Small size companies(3.2%)
Original article link : http://biz.chosun.com/site/data/html_dir/2018/10/27/2018102700186.html