Household borrowing soars to 13-year high

South Korea’s household mortgage debt more than tripled in the first quarter of this year, compared with the same period a year ago, according to data by the banking sector and the Financial Supervisory Service.Mortgage debt hit 323.5 trillion won at the end of March, up more than 7 trillion won from 316.5 trillion won at the end of last year, according to data from seven local commercial lenders.This marks the first time the increase has reached over 7 trillion won, further raising concerns ove

March 31, 2015

S. Korea to sell 7.45 tln won in state debt in April

South Korea plans to sell state bonds worth 7.45 trillion won ($6.72 billion) in April, the Ministry of Strategy and Finance said Tuesday.According to the ministry, the government will sell 1.9 trillion won in three-year Treasury notes, 1.85 trillion won in five-year debts and 2 trillion won worth of 10-year bonds next month. It also plans to issue 800 billion won worth of 20-year bonds and 900 billion won in 30-year bonds.The ministry said it sold a little under 9.62 trillion won worth of bonds

March 31, 2015

Two BOK members dissented rate cut in March: minutes

Two members of the central bank's monetary policy committee opposed a majority decision earlier this month to lower the policy rate to a record low of 1.75 percent, Bank of Korea minutes showed Tuesday.Moon Woosik and Chung Hae-bang, members of the seven-member policy board led by BOK Gov. Lee Ju-yeol, voted to keep the key rate unchanged at 2 percent, according to the minutes from the March 12 meeting. The BOK unexpectedly slashed the base rate by a quarter percentage point, joining in a global

March 31, 2015

FSC approves establishment of financial security agency

The top financial regulator said Tuesday that it has approved the establishment of an independent financial security agency aimed at enhancing information management and protection capabilities in the financial sector. The Financial Security Institute will be launched on April 10, said the Financial Services Commission.The FSI serves a comprehensive role in managing the entire flow of financial information provided by 180 banks, insurers, brokerage houses and credit card firms.It will break down

March 31, 2015

S. Korean exporters see better conditions in Q2: poll

A majority of South Korean exporters predict their second-quarter business conditions to improve slightly from three months earlier, despite lingering external market uncertainties, a poll showed Tuesday.According to the poll conducted of 702 exporters by the Korea International Trade Association, the Export Business Survey Index came to 112 for the April-June period, up from 107.1 in the previous quarter. A reading above 100 means that optimists outnumber pessimists among the export companies.T

March 31, 2015

Central bank expands dollar asset ratio in its portfolio in 2014

South Korea's central bank increased the portion of U.S. dollar-denominated assets in its foreign exchange reserves by nearly 4 percentage points last year from a year prior on expectations of a strengthening greenback, a report showed Tuesday. Dollar holdings accounted for 62.5 percent of the Bank of Korea (BOK)'s foreign assets last year, up from 58.3 percent in the previous year, according to the central bank's annual policy report."(The 2014 reading) results from an expansion in the portion

March 31, 2015

Single women’s spending rises with age

Unmarried women spend more as they age, while unmarried men’s spending shrinks with age, finance industry data showed Tuesday. According to data compiled by Shinhan Card Co., single women’s monthly expenditure rose from 592,000 won ($534) in their 20s to 713,000 won in their 30s and peaked at 938,000 won in their 40s.While the figure drops when single women hit their 50s, at 786,000 won the figure was significantly higher than that of single men in the same age group. In contrast, single men’s s

March 31, 2015

Shares of POSCO, others stung by graft probes

Shares of South Korea's top steelmaker POSCO and several other firms have been hit hard by a series of ongoing prosecution probes into alleged corruption that has raised concerns over their outlooks.The investigations began over two weeks ago after Prime Minister Lee Wan-koo declared an "all-out war" on corruption in an apparent attempt to prop up weak public support for President Park Geun-hye.Share prices of POSCO, the nation's top steelmaker, hit fresh lows in recent weeks as a probe into a s

March 31, 2015

S. Korean banks' loan delinquency rate climbs in Feb.

The delinquency rate on loans extended by South Korean banks, including household borrowing, rose for a second consecutive month in February amid concerns that snowballing household debts in the country could pose a threat to much-hoped economic expansion, the financial watchdog said Tuesday.The average bad loan rate for banks stood at 0.77 percent at the end of February, up 0.06 percentage point from a month earlier, according to the Financial Supervisory Service.It dropped to a five-year low o

March 31, 2015

Tech cluster plan advances

The government said Monday that it would accelerate the launch of the country’s biggest tech cluster in Pangyo, Gyeonggi Province, to develop the area into a Korean version of Silicon Valley. Government ministries agreed to lift the greenbelt development restrictions on the area by the end of this year, six months ahead of the initial schedule. To meet the December deadline, the ministries are pushing to submit the master development plan for the Pangyo Creative Economy Valley and file for state

March 30, 2015

Tax office loses W2.1tr in lawsuits over 4 years

The National Tax Service has lost over 2 trillion won ($1.8 billion) in tax litigations with corporates over the past four years, according to a report.Rep. Park Myung-jae, a member of the ruling Saenuri Party and of the parliamentary committee of strategy and finance, said in a report on Monday that the tax office lost 32.7 percent of the litigations over the past four years, giving away 2.1 trillion won.“Over 1.7 trillion won or 80.3 percent of the total amount was lost in suits involving 5 bi

March 30, 2015

BOK dismisses deflation concerns

Bank of Korea Gov. Lee Ju-yeol said Monday the central bank would take the country’s macroeconomic situation into close account when implementing its monetary policy for the rest of this year.In a press meeting to mark the first anniversary since he took office as the country’s top monetary policymaker, the governor reiterated that BOK had to cut its key base rate to give momentum to growth. April 1 will mark Lee’s first year in office.Despite increasing risks stemming from high household debt,

March 30, 2015

Gov't to expand FX business of big brokers this week

The government will allow nine large local brokerage houses to expand the scope of their foreign currency businesses starting this week to reinvigorate the local financial sector, the finance ministry said Monday. Nine securities companies with net worth of more than 1 trillion won ($904 million), such as Samsung, Woori and KDB Daewoo, will be able to extend foreign exchange loans starting Tuesday, the ministry said. They also will be allowed to borrow money from abroad more easily than before a

March 30, 2015

Financial regulator vows support for financially needy

South Korea's top financial regulator vowed Monday to focus more on supporting the financially needy by strengthening local microfinancing services as it kicked off a second round of the state-led debt relief program for mortgage borrowers.The pledge came one day after the Financial Services Commission (FSC) announced a plan to provide an additional 20 trillion won ($18 billion) to help borrowers convert their short-term floating-rate loans into long-term, fixed-rate ones. The first batch of fun

March 30, 2015

Corporate bill default rate falls to 20-month low in Feb.

The default rate of corporate bills in South Korea improved to its lowest level in 20 months in February as the amount of default corporate bills at cash-squeezed conglomerate Tong Yang declined, data showed Monday.The corporate bill default rate reached 0.08 percent last month, hitting the lowest level since 0.08 percent in June 2013 when the figure dipped on a fall in default corporate bills at logistics-focused conglomerate STX, according to the data by the Bank of Korea.The February reading

March 30, 2015

Bank lending rates extend falls in Feb.

Bank lending rates for new loans in South Korea fell for a second straight month in February moving in tandem with a record-low policy rate, central bank data showed Monday.The average rate for new loans to households, companies and other organizations came in at 3.86 percent last month, falling 0.04 percentage point from the previous month, according to the preliminary data by the Bank of Korea.The February reading marks a second consecutive month of decline following a brief 0.03 percentage po

March 30, 2015

Financial firms prefer ex-officials for outside directors

South Korea banks and other financial companies have hired former government officials to fill some 30 percent of outside director positions, industry data showed Monday, amid criticism that outside directors are not living up to their roles.According to the data compiled by CEO Score, the number of outside directors hired by 43 financial companies totaled 197, up 7 from the end of September.Of the newly hired, 53, or 26.9 percent, are former high-ranking government officials who have worked at

March 30, 2015