Companies have exceeded 600 trillion won in payments within a year.. ＂Financial crisis level.＂

Companies have exceeded 600 trillion won in payments within a year.. "Financial crisis level.": COMPANY / Reporter Paul Lee / 2023-10-18 06:04:09

[Alpha Biz=(Chicago) Reporter Paul Lee] Short-term borrowings that companies have to pay back within a year exceeded 600 trillion won for the first time.

According to the Bank of Korea's fund circulation table on the 18th, short-term borrowings by companies (non-financial corporations) amounted to 601.831 trillion won as of the end of June. It increased by 40 trillion won from 564.2279 trillion won at the end of last year. It rose 12.6% from 534.23 trillion won a year ago and 54.7% from the end of 2019 before COVID-19.

Short-term borrowings are loans and bonds with a maturity of less than one year. There is a lot of pressure to repay loans or refinance bonds in a short period of time. If there are not many assets that a company can securitize, the risk of insolvency increases.

In detail, short-term loans amounted to 543.6262 trillion won, up nearly 50 trillion won from 491.9168 trillion won a year ago. Companies borrowed 401.352 trillion won from banks and other deposit handling agencies, 124.239 trillion won from other financial brokerage agencies and 15.277 trillion won from insurance and pension funds. Short-term bonds amounted to 58.2048 trillion won. It increased more than 10 trillion won from a year ago (42.313 trillion won). There were many corporate bills (KRW 533.9 trillion) and corporate bonds (KRW 23.4135 trillion).

Short-term borrowings accounted for 23.49% of the total borrowings (2,561.9924 trillion won). It increased by more than 1% point from a year ago, reaching the end of 2008 (23.89%) during the global financial crisis.