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Hanyang Securities (Photo = Hanyang Securities) |
[Alpha Biz= Paul Lee] Hanyang Securities is facing relatively high exposure to affiliates of the JungAng Group undergoing rehabilitation, though credit risks are expected to remain manageable due to collateral arrangements, according to a report by NICE Investors Service.
The agency said on June 16 that Hanyang Securities holds approximately 84 billion won in exposure to JungAng affiliates, including 54 billion won tied to JTBC and 30 billion won to JoongAng Ilbo. This represents more than 12% of the firm’s equity capital of 647.8 billion won as of end-March.
According to NICE, Hanyang Securities is the only financial institution whose exposure to a single group exceeds 0.5% of total assets and 2% of capital, indicating a relatively higher concentration of risk.
In particular, JTBC’s entry into court-led rehabilitation is expected to lead to a deterioration in asset quality and increase the burden of provisioning. The JTBC-related exposure includes 10.8 billion won linked to a special purpose company (SPC) and 36 billion won in commercial paper, classified as fair value through profit or loss (FVPL) assets.
Despite these concerns, both NICE and the company view the likelihood of losses as limited. The JTBC and JoongAng Ilbo-related exposures are backed by collateral assets managed under a trust structure, with transfer security agreements secured from counterparties.
A Hanyang Securities official said the firm considers the risk of these exposures turning problematic to be low, citing the trust-based collateral management structure.
NICE added that the presence of collateral supports recovery prospects and helps mitigate potential negative impacts on Hanyang Securities’ credit profile, although it will continue to monitor the cash-generating capacity of the collateral and recovery outcomes.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
