President Kim Jae-chun of Korea Housing Finance Corp.

Korea Housing Finance Corp. celebrated its 12th anniversary in a ceremony that took place at the International Financial center in Munhyun Financial Boulevard in Busan on March 2.

In his congratulatory address, President Kim Jae-chun said the financial company should provide top-level housing financial services to win the trust of the people, the government and regional society at large.

He said all of those who work for the company cannot rest on its past achievements, quoting the late historian Toynbee saying that human history shows a repeated process of challenges and perseverance. Those who persevere against outside challenges effectively survived, but those who couldn’t diminished.

What he meant ultimately is that everyone working for the company should a professional in what he has been doing as part of his job to effectively deal with various challenges they come across in the business environment at home and abroad, showing only top professionals can take care of them.

Kim reminded everyone in attendance that Fintech and IT have changed the financial environment fast, showing that they need professionals to cope with changes so that the company might be able to keep its competitive over its rivals in the business.

“All of you should remember that your professionalism will be a great asset to the company, which is the most important thing for you to keep in your mind all the time,” the president urged.

Kim also called for the creation of an environment conducive for business, with every employee keeping an open mind and progressive attitude to foster creative ideas that will improve the company’s services.

Kim also said that every employee should balance the company’s operation with government housing policies and always be ready serve the people.

They should always be responsible to handle the company’s operation with transparency, especially in the area of providing housing financial services so that they can win trust from the government, the people and local societies, the CEO said.

KHFC is 100 percent owned by the state, and closely controlled and supervised by the government. It reports to the Ministry of Strategy and Finance and is supervised by Korea's financial regulator, the Financial Services Commission (FSC). Its president, who is appointed by the government, works as a public servant attached to the FSC. 

Its auditor is also recommended and appointed by the government. KHFC has a mandate to facilitate access to housing finance for low- and middle-income earners in South Korea. The government policy requiring Korean financial institutions to raise fixed-rate amortising mortgage loans to 30 percent of their outstanding portfolios by end-2016 enhances KHFC's policy role. It is widely expected to take a leading role in providing funding to achieve this target. Article 51 of the KHFC Act requires the state government to replenish the entity's deficits when KHFC's own reserves are not sufficient to absorb losses. 

State support is also evidenced by the government's capital injections in 2012 and 2013, which helped the entity to meet its regulatory required capital adequacy ratio of 8 percent. 

KHFC's strong liquidity and funding status is backed by its strong reputation in both the domestic and international capital markets. Its funding channels are also well-diversified, including mortgage-backed securitisation, covered bonds, senior unsecured bonds, and commercial paper. 

KHFC suffers from funding mismatch as its loan portfolio has maturities ranging from 10 to 30 years but it is funded by commercial paper and bonds with relatively short tenors. Nevertheless, the mismatch is partly mitigated by the entity's continuing securitisation of its mortgage loan portfolio and shorter effective mortgage tenor due to Koreans' tendency for early loan repayment.

President Kim delivers his congratulatory speech at the company’s 12th anniversary ceremony on March 2. (Photos:KHF)