Korean bank lending rates hit new low in May

Bank lending rates in South Korea again fell to the lowest level in May from the previous month as interest rates continued to stay low in Asia’s fourth-largest economy, central bank data showed Thursday.The average rate of new loans to households and firms stood at 4.40 percent last month, down 0.02 percentage point from the previous month, according to the Bank of Korea. The May figure marks the lowest level since the central bank began compiling related data in 1996.The BOK explained that an

June 26, 2014

Banks look for niche markets to sustain revenues

South Korean banks are increasingly banking on new sources of revenue, as traditional income streams are either in decline, or are likely to diminish significantly in a near-zero interest rate world. For the first quarter of 2014, the combined net income of 18 local banks saw their earnings drop 25.3 percent from a year earlier on contracting interest income and profitability, according to data from the Bank of Korea.Market insiders say the sharp decline in net interest margin has forced the ban

June 26, 2014

Japanese, German bearing producers being probed for price rigging: source

South Korea's antitrust watchdog is investigating Japanese and German bearing producers on suspicions that they have colluded in fixing prices of parts being supplied to local manufacturers, a government source said Thursday.The companies under investigation include Japanese bearing makers such as NSK, JTEKT, NTN and MINEBEA and Germany's Schaeffler, he added."We have sent our investigation reports to each suspected company, which will later submit its own response to us," a Fair Trade Commissio

June 26, 2014

Woori to face penalty over CJ’s fake accounts

The Financial Supervisory Service, after looking into alleged illegal business dealings by Woori Bank, will likely impose a sizeable penalty against the lender for opening hundreds of false-name accounts linked to CJ Group’s slush funds, sources close to the investigation said Tuesday.The financial regulator launched last year a special investigation into the bank, which is the main creditor of CJ Group, to look into the allegation that the bank was involved in building up the conglomerate’s slu

June 24, 2014

Korea ranks 13th in fund asset size in Q4

South Korea retained its 13th spot in the world in terms of the size of funds under management in the fourth quarter of 2013 in the face of market volatility stemming in part from the U.S. Fed tapering, data showed Tuesday. The combined net asset value of stock and bond funds managed by South Korean asset managers reached $28.52 billion at the end of December, up $3.3 billion from three months earlier, according to the data by the Korea Financial Investment Association. The net asset value refer

June 24, 2014

Chinese investors buy up Korean stocks, become largest group of foreign investors

Chinese investors poured some 1.42 trillion won ($1.38 billion) into the South Korean stock market over the past six months, backed by ample liquidity and eased offshore investment regulations, to become the largest foreign net buyers of local shares, data showed Tuesday.According to Hana Daewoo Securities Co., net purchases by Chinese investors have steadily risen from 30 billion won in December to 36 billion won in January and 42 billion won in February. The amount soared to 339 billion won in

June 24, 2014

Korea's third stock exchange remains tepid in first year

South Korea's third stock market for small companies has remained bearish since its launch nearly a year ago due in large part to thin trading and low investor confidence, said listed companies and market watchers on Tuesday, calling for eased entry rules to the market and greater incentive for trading to boost expansion. Korea New Exchange debuted on July 1 last year to provide a bourse where business start-ups and venture firms can raise funds easier via stock sales instead of having to borrow

June 24, 2014

Seoul shares end higher on optimistic China data

South Korean stocks closed higher Monday on better-than-expected industry data from China, the country’s top trading partner, analysts said. The South Korean won appreciated against the U.S. dollar.The benchmark Korea Composite Stock Price Index gained 6.85 points, or 0.35 percent, to 1,974.92. Trading volume was low at 226.9 million shares worth 3.34 trillion won ($3.27 billion), with losers outpacing gainers 510 to 313.Analysts said Seoul shares gained ground as British-based HSBC said the Pur

June 23, 2014

Is it time for central bank to move benchmark interest rate?

South Korea’s central bank is likely to leave its benchmark interest rate unchanged despite the nomination of a new hard-line finance minister and lingering worries over the strong currency, according to a survey of foreign analysts.A total of 19 of 23 analysts at foreign financial firms expected a freeze, while the remaining four predicted a possible hike later this year, Yonhap reported on Monday, citing a survey by Bloomberg.The result came as a bit of a surprise since there has been growing

June 23, 2014

Korea faces dilemma over rice market opening

South Korea is set to make a decision on opening its rice market with the deadline set by the World Trade Organization approaching.Up to now, a quota system has limited rice imports to some 8 percent of the local market, but the deal with the WTO ends this year. Now, the government has two possible options: to liberalize its rice market or to ask the world trade body for another waiver to the rice market opening. The Ministry of Agriculture, Food and Rural Affairs is expecting to announce its st

June 22, 2014

Dongbu Insurance acquires stake in Chinese firm

South Korea’s non-life insurer Dongbu Insurance acquired a stake in a Chinese non-life insurance firm in an effort to tap overseas business opportunities beyond the saturated local market, the company said Sunday.Dongbu Insurance said it has received approval from the financial authorities of South Korea and China to acquire a 15 percent stake in Ancheng Property & Casualty Insurance, becoming the third-biggest shareholder of the Chongqing-based firm.It is the first time for a South Korean insur

June 22, 2014

Korea to hold annual meeting with Fitch on credit assessment

The South Korean government will have an annual consultation with Fitch Ratings Inc. this week on the country's credit valuation, the finance ministry said Sunday.Led by Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch Ratings, the delegation will visit South Korea for meetings with the Ministry of Strategy and Finance from Tuesday to Thursday.Fitch will look into South Korea's macroeconomic issues, including its mid- and long-term plans, and the impact of external factors like the U.S

June 22, 2014

Seoul shares end lower on Samsung losses

South Korean stocks closed lower Friday as Samsung Group affiliates sharply lost ground, analysts said. The South Korean won fell against the U.S. dollar.The benchmark Korea Composite Stock Price Index fell 23.96 points, or 1.2 percent, to 1,968.07. Trading volume was low at 223 million shares worth 4.49 trillion won ($4.4 billion), with losers outpacing gainers 520 to 283.“While investors remain concerned over the Iraqi woes, the second-quarter earnings of Samsung Electronics, Hyundai Motor, an

June 20, 2014

Korea’s corporate bill default rate dips in May

The default rate of corporate bills in South Korea declined last month after hitting a six-month high in April, central bank data showed Friday.The default rate of corporate bills ― bonds, checks and promissory notes ― reached 0.16 percent in May, down from 0.22 percent the previous month, according to the Bank of Korea. A bank official attributed the on-month slip to a fall in dishonored bills held by Tong Yang Group, whose five affiliates applied for court receivership in September on liquidit

June 20, 2014

FSC, FSS fight over authority

When the nation’s financial supervisory division was split into the Financial Services Commission and the Financial Supervisory Service back in 2008, the main goal was to achieve mutual checks and balance, as well as to promote integrity and efficiency.The FSC was placed in charge of making policy decisions, while the FSS was made the official industry watchdog. But the latest turf war between the two is once again raising questions on whether the current system is ideal. Through a legislative p

June 19, 2014

Shinhan Bank boosts support for startups

Shinhan Bank’s program for offering financial support for startups has offered up to 468.2 billion won ($460 million) in low-interest loans in just a year since it first kicked off.The bank’s program was designed mainly to offer financial support for small and midsized firms that boast strong growth potential based on innovative ideas and quality products. It hopes to use the fund to help create more jobs in the sector in order to contribute to the local economy in general.“I urge all of our emp

June 19, 2014

Woori to buy Cambodian microfinance institution

Woori Bank has decided to acquire Cambodia’s microfinance institution Malis Finance for 5 billion won ($4.9 million) to accelerate its global expansion. The Financial Services Commission approved Woori Bank’s acquisition of Malis on Wednesday, according to bank officials. The purchase of the Cambodia-based firm marks the bank’s second attempt at making inroads into the Southeast Asian country after its failure in 2008 due to the global financial crisis.“It’s difficult to develop a (stable) busin

June 19, 2014