South Korea’s Financial Supervisory Service (FSS) published an update on Korean financial companies’ alternative investments in overseas real estate, reporting an outstanding balance of KRW55.1 trillion as of end-September 2025, up KRW0.6 trillion from three months earlier. The exposure represented 0.7% of total financial sector assets (KRW7,653.9 trillion), and the FSS indicated it will scrutinise loss recognition and monitor for additional risk factors. By sector, insurers held the largest exposure at KRW30.8 trillion (55.8%), followed by banks at KRW11.5 trillion (20.8%) and securities companies at KRW7.3 trillion (13.2%), with smaller amounts in mutual finance (KRW3.5 trillion), specialised credit finance (KRW2.0 trillion) and savings banks (KRW0.1 trillion). Regionally, North America accounted for 60.5% (KRW33.3 trillion), Europe 18.3% (KRW10.1 trillion), Asia 6.5% (KRW3.6 trillion) and other or multi-region investments 14.7% (KRW8.1 trillion). The FSS also reported that 6.3% (KRW3.5 trillion) of total investment is set to mature in 2025 and 68.1% (KRW37.5 trillion) by 2030; investment in individual properties totalled KRW31.9 trillion, with 6.45% (KRW2.06 trillion) exposed to events of default, though the volume of events of default declined quarter on quarter. Looking ahead, the FSS will examine whether financial companies are taking appropriate loss recognition measures, continue encouraging improvements in financial soundness, and monitor for additional risks and market uncertainty amid escalating tensions in the Middle East.
South Korea Financial Supervisory Service 2026-03-17
South Korea Financial Supervisory Service reports KRW55.1 trillion overseas real estate exposure and will review loss recognition practices
South Korea's Financial Supervisory Service reported Korean financial companies' alternative investments in overseas real estate reached KRW55.1 trillion as of September 2025, 0.7% of total financial sector assets. Insurers held the largest exposure, followed by banks and securities companies, with North America as the primary investment region. The FSS plans to scrutinize loss recognition, encourage financial soundness improvements, and monitor additional risks amid Middle East tensions.