South Korean Lenders Brace for Surge in Bad Loans Tied to Overseas Real Estate
• Banks and asset managers in South Korea face a wave of bad loans from overseas office buildings and domestic infrastructure projects • Fund managers invested heavily in European and US commercial real estate before the pandemic and market downturn • Defaults have been delayed so far, but more non-performing loans are expected as properties and loans become distressed • Regulators are scrutinizing securities firms over their risk management of investments in funds that put money into foreign property • Buyers of bad loans are poised to profit, achieving high returns on non-performing loans they have purchased