In the aftermath of the financial crisis, banks have steadily reduced their share of corporate loans among their assets.
Because the banks corporate loan portfolio continues to remain large,
the financial health of corporates will significantly contribute
to shaping their soundness and profitability in the future.
A scrutiny of the corporates financial condition, particularly of those listed on the Korea Stock Exchange,
shows indications of improvement in their capital structure. By the standards of their creditor banks,
however, corporate borrowers financial stability is yet to be seen.
While improvement in corporate profitability is mainly attributable to low interest rates and reduced debt,
operating activity and volume expansion remain restricted.
In this light, it is not easy to have full confidence over their profitability at least for the near term.
Moreover, the corporates debt servicing capability has been polarized,
while the stratum of those with lower profitability and debt servicing capability continues to claim a higher proportion.
While the corporates dependency on banks credit extensions has been declining,
and the same dependency varies by the scale or performance of the credit ratings,
we come across a broad range of implications for the banks corporate financing market.
In sum, because the growth of the corporate financing market will be limited,
and because the credit rating of those highly dependent on bank loans will be relatively lower,
the banks corporate financing strategy must be formed with even greater care than ever.
The corporates declining dependency on bank loans, and the need for a more conservative lending policy by banks,
essentially calls for a new requirement for banks loan portfolios to continually hold a diversified structure.
Another implication might be that a new management strategy is needed to reduce exposures
from financially weak borrowers and maximize recovery.
It is also necessary to diversify the sources of profit that could replace the corporate lending business with more fee-based business,
and enhance the banks profitability so that the soundness of their performance track is ensured.
기업의 재무건전성과 은행의 기업고객전략(Strategy of banks)
[서울] : 한국금융연구원
|Series Title; No||금융조사보고서 / 2003-04|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|