Korean banks expected to set aside additional KRW25bn as Wooyang HC files for court receivership

Woori Bank has the largest exposure.

It has been reported that Wooyang HC, a domestic hydrocarbon E&C company, recently filed for court receivership.

According to a research note from Nomura, it estimates that the nationwide banks under its coverage will have to set aside an additional provision of KRW25bn against their KRW45bn exposure to Wooyang HC.

This is due to the value of collateral held by the creditor banks on loans made to the company is estimated at KRW20bn.

Nomura noted that Woori Bank has the largest exposure to the company, with KRW26bn followed by Hana Financial Group and KB Financial Group with exposure to the company, at KRW10bn and KRW9bn respectively.

Further, Nomura believes the impact on the banks’ earnings is limited.