South Korea’s financial regulator announced measures to boost savings banks, including easing M&A rules and revising loan classification standards. The Financial Services Commission will set up a KRW1tr (USD689m) fund to help banks offload bad loans and create a special vehicle to manage non-performing assets. Savings banks’ total assets rose to KRW120.9tr in 2023 from KRW92tr in 2020. However, their reliance on real estate project financing and high-risk borrowers has led to financial instability. The sector posted a KRW397bn loss in 2024 after a KRW575bn loss in 2023, reversing a KRW1.56tr profit in 2022. The regulator aims to ease lending restrictions and improve banks’ financial resilience amid rising soured loans and economic uncertainty.