Korea Asset Management Corporation (KAMCO), which operates the New Start Fund debt restructuring program for small business owners, has incurred a loss of approximately 1.4 trillion won after reflecting for the first time in its accounts the gap between the purchase price of non-performing loans and their market value. Analysts warn that in the worst-case scenario, the corporation could face capital erosion, making a large-scale capital increase unavoidable.
According to financial industry sources on Tuesday, KAMCO recorded valuation losses of 1.4065 trillion won from its New Start Fund contributions for the years 2022 through 2025 in its 2025 financial settlement.
KAMCO contributed 2.41 trillion won to the New Start Fund, but its actual market value came to just 1.0035 trillion won. The difference was booked as a loss. As a result, KAMCO's accumulated other comprehensive income plunged from 25.8 billion won at the end of 2024 to minus 1.0244 trillion won at the end of last year. KAMCO reportedly reflected the difference in its settlement following criticism from the Board of Audit and Inspection.
The bigger concern lies ahead. The government plans to accept a total of 40 trillion won worth of debt restructuring applications by the end of this year, when the New Start Fund application period concludes. Given that debt restructuring applications stood at 30.189 trillion won as of the end of March this year, about 10 trillion won in additional applications could come in. ▷Continued on Page 4
