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[Apha Biz=(Chicago) Reporter Paul Lee] Securities firms' growth in bad assets more than doubled in three months, the report showed.
According to the Financial Supervisory Service's Financial Statistics Information System on the 12th, 48 domestic securities firms had 3.7494 trillion won in fixed assets as of the end of June this year. Among them, the increase in the second quarter (April ∼ June) was 709.6 billion won, up 92.9% from the previous quarter's increase (367.9 billion won). Securities firms' sub-fixed assets include recovery statements and estimated loss assets and are usually classified as insolvent assets.
By the end of last year, securities firms' fixed assets stood at 2.6718 trillion won, but rose to 3.397 trillion won at the end of March this year. The securities industry attributed the increase in bad assets in the second quarter to the unpaid amount caused by the lower limit on Societe Generale (SG) securities, which occurred in late April. However, analysts say that the actual amount of bad assets held by securities firms is much larger than this.
Nice Credit Rating said in a recent report that the soundness index of securities firms' bad assets is separated from the actual one. As of the end of June, sub-fixed real estate project financing (PF) assets of 25 local securities firms are estimated at KRW 1.2 trillion, but they will increase to KRW 6 trillion if conservative standards are applied. It also added that most alternative investment assets, such as overseas real estate, were invested as beneficiary securities and excluded from insolvent assets, but if losses are recognized when the fund expires, the soundness index could worsen.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
