Korea Development Bank to Look Closely into Companies in 13 Sectors

On June 1, the Korea Development Bank (KDB) released a report on how to carry out credit exposure assessment and how to improve its credit exposure limit management in 2016. According to the report, the KDB is planning to change its credit exposure limit management system by industrial portfolio as follows.

First of all, the KDB is to divide the beneficiaries of its business loans into those in industries in general and those in priority control industries depending on the respective magnitudes of risk exposure. Then, a relatively limited exposure limit is to be applied to the latter.

According to the bank, 13 sectors fall into the category of the latter, which includes companies each with a credit risk exposure of at least two trillion won and companies with a credit risk exposure exceeding the equity capital of each. This group consists of shipbuilding, automobile, steel construction, etc.

When it comes to certain companies in these more vulnerable industries, the KDB is going to cut its extra credit line from 30% to 5% per year.