Six regional banks, housing builders and guarantors sign pact to support local housing
In short
Six South Korean regional banks, the Korea Housing Builders Association (대한주택건설협회) and two guarantee agencies, HUG and HF, signed a cooperation agreement on October 8 at the head office of BNK Kyongnam Bank (BNK경남은행) in Changwon. The parties pledged to improve access to finance for small and mid-sized regional housing developers and to build a lending and guarantee system linking regional banks and guarantors.
Read the full story 2 min read
The Korea Housing Builders Association (대한주택건설협회), six regional banks and two guarantee agencies signed a cooperation agreement on October 8 at the head office of BNK Kyongnam Bank (BNK경남은행) in Changwon. The banks are BNK Kyongnam Bank, BNK Busan Bank (BNK부산은행), iM Bank, Jeonbuk Bank (전북은행), Kwangju Bank (광주은행) and Jeju Bank (제주은행); the guarantee agencies are the Housing and Urban Guarantee Corporation (HUG) and the Korea Housing Finance Corporation (HF). [ 1 , 2 , 3 , 4 ]
According to BNK Kyongnam Bank, the agreement was prepared under the lead of the bank and the association to revitalise the regional housing construction industry, create a virtuous cycle in regional finance and contribute to balanced regional development. Asia Economy, citing the association, said it was designed to address the deepening crisis of regional decline and polarisation. [ 1 , 2 , 3 ]
The participants agreed to cooperate on four areas: creating a financing and guarantee environment that improves access to funds for small and mid-sized regional housing developers, building a support system linking regional banks and guarantee agencies, setting up a private-sector-led cooperation network to ease polarisation and strengthen regional self-reliance, and finding financing and guarantee support to help future generations settle and secure stable housing in the regions. [ 2 , 3 ]
Under the deal, the regional banks plan to offer flexible and fast funding and financial support for future generations. The association said it will encourage its members to bank with and deposit funds at regional banks and will identify sound project sites. The guarantee agencies plan research with the regional banks on public guarantee products tailored to regional housing markets. [ 2 , 3 ]
BNK Kyongnam Bank chief executive Kim Tae-han (김태한) said the regional construction industry faces difficult conditions due to the economic slowdown and the burden of financing costs, making close cooperation among lenders, guarantors and builders important. He said the participants would work out practical measures so regional housing developers can obtain the financing and guarantees they need, and, according to Hankook Ilbo, added that the bank would lead efforts to make regional funds support regional growth. [ 1 , 2 ]
Association chairman Kim Seong-eun (김성은) said the agreement would form a basis for more flexible financing and tailored guarantees for small and mid-sized developers struggling to raise funds, and that the association would work to build a financial and guarantee safety net for its members, Asia Economy reported. [ 3 ]
Why it matters
The participants say the deal is meant to help regional housing developers that, according to BNK Kyongnam Bank's chief executive, face an economic slowdown and heavy financing costs. The guarantee agencies plan research on public guarantee products tailored to regional housing markets, though no specific products, amounts or timelines were announced.
Key facts
- The agreement was signed on October 8 in a meeting room at BNK Kyongnam Bank's head office. [ 1 , 2 ]
- Participants were BNK Kyongnam Bank, BNK Busan Bank (BNK부산은행), iM Bank, Jeonbuk Bank (전북은행), Kwangju Bank (광주은행), Jeju Bank (제주은행), the Korea Housing Builders Association, the Housing and Urban Guarantee Corporation (HUG) and the Korea Housing Finance Corporation (HF). [ 1 , 2 , 3 , 4 ]
- The agreement was prepared under the lead of BNK Kyongnam Bank and the Korea Housing Builders Association, according to the bank. [ 1 , 2 ]
- Parties will work to improve financial access for small and mid-sized regional housing developers and build a financial support system linking regional banks and guarantee agencies. [ 1 , 2 , 3 ]
- They will also look for financing and guarantee support to help future generations settle and find stable housing in the regions. [ 1 , 2 , 3 ]
- The guarantee agencies plan research with the regional banks on developing public guarantee products tailored to regional housing markets. [ 2 , 3 ]
Confirmed by several sources
- Six regional banks, the Korea Housing Builders Association, HUG and HF signed a cooperation agreement on October 8 at BNK Kyongnam Bank's head office. [ 1 , 2 , 3 , 4 ]
- The agreement aims to improve access to finance and guarantees for small and mid-sized regional housing developers. [ 1 , 2 , 3 ]
- BNK Kyongnam Bank CEO Kim Tae-han (김태한) said the regional construction industry faces difficult conditions due to an economic slowdown and financing cost burdens. [ 1 , 2 ]
Still unclear
- The official name of the agreement. Yonhap and Hankook Ilbo call it an agreement for cooperation among the housing builders association, regional banks and guarantee agencies, while Asia Economy, citing the association, calls it an MOU for balanced regional development and overcoming the crisis of regional decline.
- The size, terms and timing of any lending or guarantee products. None of the documents give figures, specific products or a schedule.
What local media are saying
Timeline, local time
- Yonhap reports that BNK Kyongnam Bank signed the agreement with the association, five other regional banks and two guarantee agencies. [ 1 ]
- Hankook Ilbo publishes details of each party's role and further remarks from the bank's chief executive. [ 2 ]
- Asia Economy reports the agreement from the association's side, quoting its chairman. [ 3 ]
- Yonhap runs a bulletin item on the association's agreement with the regional banks and guarantors. [ 4 ]