Seoul: Financial firms' exposure to overseas real estate has been properly managed despite lingering woes over their potential deterioration, the country's watchdog said Thursday.

According to Yonhap News Agency, the outstanding value of overseas real estate invested by Korean financial institutions amounted to nearly 55.8 trillion won (US$39.8 billion) at the end of September 2024. This figure represents a decrease of 500 billion won from three months earlier.

The third-quarter reading also shows a decline from 57 trillion won at the end of March last year and 57.6 trillion won at the end of 2023. These investments in overseas real estate accounted for 0.8 percent of the total assets, which stood at 7,182.7 trillion won.

Approximately 2.64 trillion won worth of these investments were estimated to be at risk of turning sour by the end of September, comprising 7.71 percent of the total, with the figures remaining relatively stable, as reported by the watchdog.

The Financial Supervisory Service (FSS) indicated it will tighten regulatory supervision on real estate projects that pose a risk of deterioration.