(Feb 19): South Korea’s five largest financial companies are facing about one trillion won (US$749 million or RM3.58 billion) of losses from their 20 trillion won of overseas real estate investments, according to an opposition party lawmaker, reflecting growing concern over the sector’s exposure to falling valuations worldwide.

Hana Financial Group Inc has the largest exposure, with over 6.2 trillion won invested outside of the country, data from Yang Kyung-sook of the Democratic Party show. Yang’s data, first reported by local media outlets including Yonhap, is based on information provided by the companies in mid-January.

KB Financial Group Inc has 5.7 trillion won of investment, while Shinhan Financial Group Co, Ltd invested four trillion won. Woori Financial Group Inc and Nonghyup Financial Group Inc round out the top five in overseas real estate holdings.

Credit investors in Korea are on the watch for signs of trouble after a branch of one of Korea’s biggest credit unions was shut last year following losses on real estate-related loans. The potential for the US commercial real estate downturn causing trouble in Korea got hammered home earlier this year, when Tokyo-based Aozora Bank Ltd stunned the market by setting aside large provisions for bad loans even after assuring investors that it was adequately prepared.

The five firms’ original investment of 10.44 trillion won that was spent through alternative investments — such as beneficiary certificates and funds — is now valued at 9.34 trillion won, reflecting a 10.5% loss, according to the Korea Herald and other Korean media reports.