Half of Korean Inc. may not afford debt financing with earnings up 3%p gain in loan rate

[Photo by MK DB]

Half of Korean companies subject to outside auditing won’t be able to afford debt financing cost with earnings if lending rates increase by 3%p from now, warned the Federation of Korean Industries (FKI). Among the 17,827 companies subject to outside auditing, 34.1% were categorized as financially marginalized upon reporting 2021 operating profits smaller than the costs for interests. If lending rates go up by 3%p, the ratio jumps to 47.2%.

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