It was found that trust fees for real estate trust companies increased by 2.4% in 2020 compared to 2019.
The Financial Services Commission announced that it will strengthen analysis and inspection of financial soundness and liquidity risks for real estate trust companies that are sensitive to changes in the real estate economy.
14 trust companies KB Real Estate, Kyobo Assets, Daishin Assets, Daehan Land, Mugunghwa, Shinyoung Real Estate, Asia, Woori Assets, Koramco Assets, Korea, Hana Assets, Korea Assets, Korea Land, and Korea Investment Real Estate under trust approval In progress.
According to data from the Financial Services Commission, as of the end of 2020, the total trust amount of 61* trust companies was 1,032.3 trillion won, up 68.1 trillion won (+7.1%) from the end of the previous year. The number of companies increased by 1 year-on-year due to the approval of KB Insurance’s financial trust business (Dec. 20).
Banks (492.7 trillion won) and securities firms (244.3 trillion won), up 12.3 trillion won (+2.6%) and 11.4 trillion won (+4.9%), respectively, compared to the end of the previous year, while insurance companies fell 2.5 trillion won (△12.3%) from the end of the previous year to 17.9 trillion won. .
For real estate trust companies, the entrusted amount was 277.4 trillion won, an increase of 46.9 trillion won (+20.3%) from the end of the previous year.
By trust property, money and property trusts increased by 23.1 trillion won (+4.8%) and 44.7 trillion won (+9.2%), respectively, compared to the end of the previous year. Money trusts (502.6 trillion won) mainly increase in retirement pension trusts (+23.4 trillion won) and occasional deposit and withdrawal trusts (+10.1 trillion won) of conjunctive trust companies among specified money trusts (486 trillion won), and property trusts (529.2 trillion won) are mainly banks and trusts. The mortgage trust of real estate trust companies (+40.4 trillion won) increased.
The real estate trust company explained that it was attributable to a decrease of 99.6 billion won (△27.5%) in loan-type land trust fees.
An official from the Financial Services Commission said, “In the case of real estate trust companies that are sensitive to changes in the real estate economy, we will strengthen analysis and inspection on financial soundness and liquidity risks, while in-depth analysis of the products incorporating specific money trusts will lead to a short-term increase in sales volume, the phenomenon of a focus on specific products, We plan to intensively monitor the risk factors of newly incorporated products and respond to market changes in a timely manner.”
Explanation of terms
A trust is where a person (consignor) who owns property rights such as money or real estate attains property rights (trust property) to the trustee, and at the same time manages and disposes the property for himself or another person (beneficiary) for a certain purpose (trust purpose). It’s a legal relationship.
The most distinctive feature is the transfer of property rights from the consignor to the consignee (complete transfer of ownership both internally and externally). Although property belongs to the trustee internally and externally, it belongs to the beneficiary in economic and practical terms. The trust property is independent of the trustee and the trustee.
Real Estate Trust Company
It differs from a monetary trust in that the trust property targets real estate and real estate-related rights. Trust products include land (development) trusts, management trusts, disposal trusts, mortgage trusts, sales management trusts, and agency services, and other services include real estate brokerage services and real estate consulting services.
Author/ Translator: Jamie Kim
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