Inter-affiliate loan guarantees at S. Korea’s top 30 conglomerates jump 20%

[Photo by Kim Ho-young]

Inter-affiliate loan guarantees at Korea’s top 30 business groups jumped 20 percent this year.

CEO Score, a Seoul-based business data tracker, said Wednesday that its study into publicly disclosed loan guarantee data of 207 companies under the country’s top 30 conglomerates by assets showed inter-affiliate loan guarantees amounted to 87.7 trillion won ($68 billion) at the end of September, gaining 15 trillion won or 20.7 percent from the end of December 2021. Compared with the end of 2020, the figure rose by 30.1 trillion won, or 52.3 percent.

SK Group topped the list with 10.8 trillion won worth of loan guarantees made between affiliates. Samsung came second with 9 trillion won, followed by NH Nonghyup with 8.89 trillion won, POSCO with 7.8 trillion won, LG with 7.5 trillion won and Hyundai Motor with 6.98 trillion won.

Hyosung showed the highest loan guarantee to equity ratio of 80.3 percent. Its loan guarantee amounted to 5.09 trillion won and equity 5.3 trillion won.

CJ had loan guarantee exceed 30 percent versus equity with 25.4 percent. NH Nonghyup recorded 32.7 percent and Kakao 30.6 percent.

SK also ranked the top in loan guarantee growth, with an increase of 4.7 trillion won or 76.5 percent, largely due to its massive investment in electric vehicle battery business.

Doosan showed the largest contraction in loan guarantees, shrinking by 7.2 trillion won or 27.6 percent.

As a company independent from a group, NH Nonghyup Bank had the largest loan guarantee of 8.9 trillion won at the end of September.

Some even had loan guarantees exceeding their equity. Hyosong Chemical topped the list with 311.5 percent, with loan guarantee amounting to 1.7 trillion won on equity of 553.5 billion won.

SK on, EV battery maker under SK Group, showed the fastest growth in loan guarantees this year to September. Its loan guarantees increased by 1.98 trillion won or 68.6 percent.

Kia recorded the biggest decline of 613.1 billion won, followed by CJ ENM, Doosan Enerbility and Doosan Bobcat.