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South Korea’s top banks at risk amid real estate downturn



South Korea’s top commercial banks, KB Kookmin, Shinhan, Hana, Woori, and NongHyup, face potential losses in overseas real estate investments amid a global market downturn, with high interest rates exacerbating the situation. The banks have a combined investment balance of KRW753.1bn (USD580m), with funds worth KRW257.1bn nearing maturity next year. The prolonged slump in the property market, especially in commercial real estate, threatens these investments. Should the market not recover by the fund maturity dates, losses may occur, although these may be mitigated by potential maturity extensions. This risk extends beyond banks to local brokerages and asset managers with significant investments in the US and European real estate. The Financial Supervisory Service reports a total overseas investment of KRW55.8tr, with KRW14.1tr maturing in the coming year.

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