Evergreen Tree sells 500 billion in long-term non-performing loans to the South Korean asset management company, New Feiyue Fund

A financial company decided to transfer approximately 500 billion won in long-term overdue claims held by private non-performing banks to the “New Jump Fund” of the Korea Asset Management Corporation (KAMCO), which has once again accelerated the cleanup of aging overdue claims.

According to Financial Market News on the 12th, among the claims held by the private non-performing debt management company “Evergreen Tree First Liquidity Professional Co., Ltd.” (“Evergreen Tree”), the amount slated for sale totals 493 billion won after removing assets such as “revived claims” and other assets that are difficult to transfer, from the overall 850 billion won. In mid-last month, KAMCO requested assistance from Evergreen Tree to sell them, and thereafter extended the response deadline to the end of June. Evergreen Tree is a special-purpose company established in the early 2000s during the credit card crisis, funded by banks and credit card companies, and it has long managed non-performing claims that are difficult to recover.

It is understood that the decision to sell was delayed for a long time not because of any opposition, but because the review of procedures and materials was not sufficiently thorough. Evergreen Tree’s business trustee is Industrial Bank, while asset management is handled by NH Investment & Securities. At the company meeting held on the 28th of last month, the investors raised reservations on the grounds that they could not secure sufficiently detailed asset information. These financial companies said that, in order to agree to the sale, a resolution by the board of directors was required, and therefore more time was needed to carefully review the current status and legal standing of each claim. NH Investment & Securities has recently sent the full list of assets pending sale, and it is expected that more specific details will be compiled within this week.

Against this backdrop, President Lee Jae-myung issued strong criticism of the collection of long-term overdue claims, which has also accelerated actions in the financial sector. On the same day, companies including KB Kookmin Bank, Woori Bank, IBK Industrial Bank, Shinhan Card, and Woori Card stated that they would sell the portions of long-term overdue claims held by Evergreen Tree that belong to their respective shares to KAMCO’s “New Jump Fund.” Some companies may first publicly state their intention to sell, and then carry out further review of the detailed information. The shares of Evergreen Tree are held by six financial companies—Shinhan Card (30%), Woori Bank (10%), IBK Industrial Bank (10%), Woori Card (10%), KB Kookmin Bank (5.3%), and KB Kookmin Card (4.7%)—accounting for about 70% in total, with the remaining 10% held by entities such as US Consulting Loans, Kano Investment, and Nice Third.

The “New Jump Fund” is a policy measure designed to ease the burden on long-term small-amount overdue debtors who have effectively lost the ability to repay, through mediation or cleanup by acquiring claims. However, there has long been a view that the claims held by Evergreen Tree were not previously included in this system, which prevented related debtors from receiving benefits such as principal reductions or the suspension of collection efforts. If this sale is ultimately completed, it could enable financial companies to clear out old non-performing assets; for debtors, it could reduce collection burdens and broaden opportunities for debt restructuring. In the future, this trend may extend to discussions about cleaning up other long-term overdue claims, and whether the financial sector’s approach to handling non-performing claims will shift from being purely recovery-centered to being restart-support centered will become an important point of attention.