UAMCO joins the “1 trillion won club” for NPL purchases [fn Market Watch]

[Financial News] United Asset Management Company (UAMCO) has joined the “1 trillion won club” for purchases in the banking sector’s non-performing loan (NPL) market, drawing attention. It has been recognized for demonstrating its credentials as a top NPL player despite lower returns due to rising interest rates. With NPLs coming onto the market in the fourth quarter estimated to significantly exceed 2 trillion won, joining the “3 trillion won club” for purchases is also a possibility.
According to the investment banking (IB) industry on the 1st, UAMCO bought NPLs worth 550.2 billion won in recent third- and fourth-quarter NPL sales by the Korea Development Bank (KDB) and Industrial Bank of Korea (IBK), bringing its cumulative NPL purchases this year to 1.3731 trillion won.
UAMCO bought NPLs worth 3.8006 trillion won in 2024, joining the 3 trillion won club for the first time. It has previously purchased NPLs worth 1.77 trillion won in 2017, 2.1 trillion won in 2018, 2 trillion won in 2019, 1.37 trillion won in 2020, 1.1664 trillion won in 2021, 1.2485 trillion won in 2022, 2.1267 trillion won in 2023, and 3.7142 trillion won in 2025.
In the third and fourth quarters, Hana F&I bought NPLs worth 161.8 billion won, bringing its cumulative purchases this year to 510.7 billion won.
The problem is declining profitability due to rising funding costs. Compared with the COVID-19 period, funding rates have risen by about 200 basis points (1 bp = 0.01%), even by a simple calculation. Back then, profits could be made even with winning-bid ratios close to 100%, but that is difficult at current levels in the 60% range.
As banks have opted to withdraw sales, winning-bid ratios have not fallen sharply. The average winning-bid ratio in the first half of this year was 67.9%, down 2.9 percentage points from 70.8% in the same period a year earlier.
An IB industry official explained, “When banks sell logistics centers as NPLs, NPL investment companies have to sell those NPLs to companies that need logistics centers. They need to raise funds through loans in this process, but banks have sharply cut the credit limits available for those loans. As a result, the process of normalizing and then selling NPLs has become more difficult than before.” This shows that the recovery of previously acquired assets is also being delayed as the ultimate buyers—the end users—are unable to secure financing.
Bond maturities are also a burden for NPL investment companies. According to NICE Investors Service, bonds scheduled to mature at five major domestic NPL investors—UAMCO, Daishin F&I, Hana F&I, Kiwoom F&I and Woori Financial F&I—total 2.5 trillion won in 2027 and 2.9 trillion won in 2028. These amounts are significantly higher than the 1 trillion won in 2025 and 2 trillion won in 2026. The weighted average interest rate on corporate bonds issued by NPL investors rose from an annualized 2.97% in the second half of 2025 to 4.06% in the first half of this year and 4.75% in the third and fourth quarters. That is an increase of 1.78 percentage points from the second half of last year.
Meanwhile, NPL sales totaled 8.0125 trillion won last year. In descending order, the amounts were 3.7142 trillion won for UAMCO (United Asset Management Company), 1.612 trillion won for Daishin F&I, 1.05 trillion won for Hana F&I, 871.7 billion won for Kiwoom F&I, 509.6 billion won for Woori F&I, 116.5 billion won for K-Clavis Asset Management, 94.8 billion won for Eugene Asset Management Co., Ltd., and 34.7 billion won for Mirae F&I.
According to the Financial Supervisory Service (FSS), domestic banks’ NPLs totaled 18.9 trillion won at the end of June, up 1.2 trillion won in a single quarter and the highest level since June 2018. New NPLs also rose by 1.7 trillion won to 7.2 trillion won, including 4.5 trillion won in new bad loans to small and medium-sized enterprises.
[email protected] Kang Gu-gwi Reporter