The Korea Herald

BOK’s statement on monetary policy decision for August

Following is a translation of the full text of the Bank of Korea’s statement on monetary policy decision for August. The central bank cut the policy interest rate by a quarter percentage point to 2.25 percent after keeping the rate on hold for 14 straight months. ― Ed.The Monetary Policy Committee of the Bank of Korea decided today to lower the base rate by 25 basis points, from 2.50 percent to 2.25 percent.Based on currently available information, the committee considers that, although the tren

Aug. 14, 2014

BOK’s statement on monetary policy decision for August

BOK cuts rate to 2.25% as expected

In a widely expected move, South Korea's central bank on Thursday lowered the policy interest rate to 2.25 percent in a coordinated effort to prop up flagging consumption and sentiment.The decision, which marks the first rate cut since May 2013, is in line with a poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency. Twenty-one out of 23 analysts had projected the central bank would cut the rate in the face of growing pressure from the government and lawmakers, while the

Aug. 14, 2014

Service sector regulations eased

South Korea will support the launch of profit-seeking foreign hospitals and expand the development of casino-focused integrated resorts in free economic zones to induce foreign investment, the government said Tuesday. It will also grant higher credit limits to innovative start-ups and develop more exporters. These and other plans for promoting trade and investment were announced at a meeting presided over by President Park Geun-hye. A series of deregulations in seven key service industry sectors

Aug. 12, 2014

Savings banks begin crisis recovery

The local savings bank industry appears to be getting back on its feet after suffering from a chain of bankruptcies in 2011, according to industry sources. According to the Financial Supervisory Service, the 87 savings banks operating in Korea recorded total net profits of 23.8 billion won ($23 million) in the second quarter. It was their first collective profit since 2008.Also, 18 of the banks managed to stay in the black for six consecutive years despite most of them being small banks with ass

Aug. 12, 2014

Korea Minting evolves into IT security solution provider

State-run Korea Minting, Security Printing & ID Card Operating Corp. has evolved from a banknote manufacturer to a total security solution provider ― a transition backed by sustainable management and significant sales growth over the past several years.“We owe our recent progress to the success in overseas sales, combined with a profitable gold bar business,” said an official of KOMSCO.In 2013, KOMSCO recorded total sales of 427 billion won ($414 million), up 20 percent from the previous year.It

Aug. 12, 2014

Korea Minting evolves into IT security solution provider

[Herald Interview] Rise of IT firms may spur banks: KIF chief

The entry of highly competitive tech firms in the local financial sector may be an opportunity, rather than a threat, for conventional financial institutions, according to a state-run think tank chief.“The entry of these IT firms will eventually push banks to establish their own digital businesses, which will consequentially create new sources of income,” Yun Chang-hyun, president of the Korea Institute of Finance told The Korea Herald in an interview.His remarks came amid rising concerns within

Aug. 11, 2014

[Herald Interview] Rise of IT firms may spur banks: KIF chief

BOK likely to cut rate this month: poll

South Korea’s central bank is expected to cut the base rate in August after a 14-month pause as the government is drumming up support for its 41 trillion won ($40 billion) stimulus aimed at boosting flagging consumption, a poll showed Monday.A clear majority of 21 out of 23 analysts surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency, forecast the Bank of Korea would cut the policy rate to 2.25 percent from 2.5 percent at an upcoming policy board meeting on Thursday. Two ana

Aug. 11, 2014

[Graphic News] RMB deposits hit record high

Chinese yuan-denominated deposits at banks in South Korea hit a record high as banks offered higher interest rates on savings accounts for consumers, according to Korea’s central bank. Meanwhile, those of the U.S. dollar fell sharply last month, the Bank of Korea data showed.Renmibi deposits amounted to $16.2 billion, accounting for almost 26 percent of the total foreign currency deposits as of the end of July.The portion of dollar deposits fell to 64.5 percent, down 4.5 percent from the previou

Aug. 10, 2014

[Graphic News] RMB deposits hit record high

Regulators to punish KB Financial executives this week

The financial watchdog is expected to wrap up its delayed punishment of top executives at KB Financial Group that have been held responsible for a string of irregularities and scandals as early as this week, an official said Sunday.“The punishment against 95 executives and employees at KB Financial Group and Kookmin Bank is expected to be complete this month. The level of the punishment may be determined at an upcoming meeting on Thursday,” said an official at the Financial Supervisory Service.G

Aug. 10, 2014

Investors’ demand for low-grade corporate debt rising

Sales of low-grade corporate bonds, once shunned by investors over high-rated corporate debts and safer government debts, rose sharply last month, showing signs of emerging good investment tools, data indicated Friday. A total of 5.9 trillion won ($5.69 billion) worth of corporate bonds were sold in July, up 2.2 trillion won from a month earlier, according to the data compiled by the Korea Financial Investment Association. The sales of corporate bonds rated “AA” or above totaled 4.45 trillion wo

Aug. 8, 2014

Foreigners net buy Korean stocks for 4th month in July

Foreign investors continued to pour into South Korean stocks last month, extending their fourth straight month of net buying, with their investment jumping more than fivefold from a month earlier, the country’s financial watchdog said Friday.Offshore investors snapped up a net 3.6 trillion won ($3.49 billion) worth of local shares in July, compared with a net purchase of 714 billion won in the previous month, according to the Financial Supervisory Service.The value of their shareholdings came to

Aug. 8, 2014

NH Financial evolves as high-profile group

The rise of NH Financial Group to the nation’s fourth-largest financial group has not only reshaped the local financial landscape, but also wowed critics who had been skeptical of whether it was capable of such a feat. In the recent process of acquiring Woori Investment & Securities, Woori Aviva Life Insurance and Woori Savings Bank, the group has beaten Woori Financial Group in terms of assets.“NH Financial is now ready to compete with the industry’s top players,” said Yim Jong-yong, the NH Fin

Aug. 7, 2014

Kakao ― boon or bane to finance?

South Korean financial companies such as banks and credit card firms will have to come up with a new business model to counter Kakao’s soon-to-launch financial transaction service, Woori Finance Research Institute said.The most-used mobile messenger’s Bank Wallet Kakao, or KaTalk Bank, which is expected to launch in September, will have a limited impact on the financial services sector as it only allows users to transfer money or purchase online goods of up to 100,000 won ($97) a day.However, Ka

Aug. 7, 2014

Choi denies eased dividend income tax will only benefit chaebol owners

Finance Minister Choi Kyung-hwan dismissed claims that easing taxes on dividend income would only benefit the owners of large conglomerates, saying that it would be helpful for the overall economy.The government proposed a set of tax code revisions on Wednesday, including lowering the tax rates on dividend income from 14 percent to 9 percent. The move is intended to encourage companies to increase dividend payouts and induce money flows from companies to small shareholders. But critics charge th

Aug. 7, 2014

Tax rate on big firms’ cash holdings set at 10%

Conglomerates or individual companies with 50 billion won ($48 million) or more in total equity will face new taxes if they fail to spend enough on new investment and salaries, the Finance Ministry said Wednesday as it announced a set of tax reforms designed to funnel more corporate funds into households and ultimately stimulate the economy. The ministry also said it would lower the tax rates on dividend income in efforts to inflate the amount of disposable income for local households. These rev

Aug. 6, 2014

Revised privacy law to take effect amid concerns

A revised privacy law prohibiting all public institutions and companies from collecting citizens’ resident numbers is coming into effect on Thursday as planned, but concerns linger as to its effectiveness. Earlier this year, the government announced that it will ban firms from requesting resident registration numbers ― the most generally used form of identification here ― for commercial and financial transactions. Credit cards, banks and other financial institutions must also wipe resident numbe

Aug. 6, 2014

Seoul shares down 0.27% on Ukraine woes

South Korean stocks ended 0.27 percent lower Wednesday as investor sentiment turned sour on concerns over turmoil in Ukraine amid profit-taking from recent gains, analysts said. The South Korean won lost ground against the U.S. dollar.The benchmark Korea Composite Stock Price Index fell 5.53 points to 2,060.73. Trading volume was moderate at 363.1 million shares worth 5.06 trillion won ($4.89 billion), with decliners beating gainers 463 to 346.“External factors weighed on investor sentiment. Inv

Aug. 6, 2014

Cuckoo Electronics shares soar on first day of trading

Investors loaded up on shares of Korea’s top rice cooker producer Cuckoo Electronics Wednesday, pushing the price up by the daily limit of 15 percent on its first day on the benchmark KOSPI.Fueled by high expectations for expansion in China, Cuckoo Electronics’ shares rose by the daily ceiling of 15 percent within 30 minutes of trading, going from 180,000 won ($174) to 207,000 won. The company’s initial public offering was priced at 104,000 won.Cuckoo's market value soared to 2.02 trillion won

Aug. 6, 2014

Textile business pioneer dies at 99

Park Yong-hakPark Yong-hak, honorary chairman and founder of the now defunct textile-maker Dainong Group, died on Saturday of a chronic illness. He was 99. Born in 1915 in Gangwon Province, Park established Daehan Nongsan ― a grain and fertilizer exporter ― in 1955. After acquiring Midopa Department Store in 1971, Park changed the name of his business to Dainong Group before handing it over to his son in 1989. The group expanded under the junior Park’s helm but was liquidated in 1998 amid the As

Aug. 5, 2014

Counterfeit $100 bills on rise in Korea

South Korean lenders have seen a rise in counterfeit $100 bills in the first seven months of the year following the release of the redesigned denomination with bolstered security features, data showed Tuesday.The value of fake U.S. notes found at seven local banks reached $73,143 in the January-July period, compared with $47,576 the previous year, according to industry data. Most of the counterfeit bills in circulation were $100 bills, which are the highest denomination in the U.S. currency syst

Aug. 5, 2014