The government has injected 1.5 trillion won (US$1.29 billion) into a state housing financing firm to help improve its financial soundness hurt by snowballing mortgage loans, the financial regulator said Monday.
The liquidity injection into the state-run Korea Housing Finance Corp. (KHFC) was made through the government's transfer of its 15 million shares in the Korea Expressway Corp., according to the Financial Supervisory Service (FSS).
It marks the third time this year that the government has made the investment in-kind for the public firm, with the total cash injection reaching 400 billion won.
KHFC has been struggling since March due to a 40 trillion-won program that aims to help borrowers convert short-term floating-rate mortgages into long-term fixed rate ones to prepare them for a potential rate hike.
"The investment improved the corporation's financial health by boosting its paid-in capital to 1.83 trillion won from 1.68 trillion won," an FSS official said.
According to the Bank of Korea, home-backed loans extended by local lenders gained 7.5 trillion won from a month earlier to 487.5 trillion won, which attributed to record-high household debt.
In the third quarter, the country's household credit topped 1,160 trillion won, marking the highest level since the central bank began compiling the data in 2002. (Yonhap)
