Borrowers to sue over bank bullying

Financial firms seize assets, salaries as value of loan collateral dipsA consumer group is planning a class action against financial institutions for seizing the assets and salaries of mortgage borrowers as property prices nosedive. The Financial Consumer Agency said an estimated 1 million people who took out some 10 trillion won ($8.85 billion) in mortgage loans are “unreasonably pressured” by financial firms to pay back the loans as they near maturity and home prices plummet.The FCA said Thurs

Aug. 2, 2012

Bank customers file suit over alleged rate-fixing

Three customers have filed a compensation suit against local banks, arguing that they suffered damage from the banks' alleged collusion to rig interest rates on certificates of deposit (CD) that are tied to interest rates on home mortgage loans, court sources said Thursday.The lawsuit is the first to be filed since the Fair Trade Commission (FTC), the country's anti-trust watchdog, began looking i

Aug. 2, 2012

Minimum tax rate for big companies set to be raised

The government and the ruling Saenuri Party agreed Wednesday on raising the minimum tax rate for large firms that receive various tax benefits from the current 14 percent to 15 percent.The revised tax bill also includes lowering the tax cut limits for big businesses; imposing taxes on financial income of more than 30 million won, down from the current 40 million won; expanding taxation on gains from stock transfers by major shareholders; and introducing transaction taxes on derivatives. The Saen

Aug. 1, 2012

Majority of experts see chance of ‘systemic risk’ in 3 years

A survey of local financial experts conducted by the Bank of Korea in July showed that a majority of them see a high chance of a “systemic risk” occurring in the next three years.Of the 74 respondents, 52.7 percent said the possibility of a systemic risk, or the risk of collapse of an entire financial system or entire market, occurring between one to four years from now was high. Twelve percent answered the opposite.As for the probability of a systemic risk occurring within a year, 27.1 percent

Aug. 1, 2012

FSS seeks to ease household mortgage payments

Korea’s financial watchdog said Wednesday it is seeking to adopt steps to ease households’ repayment burden of home-backed loans as the slumping property market erodes the value of collateral.The Financial Supervisory Service said it is studying plans to have banks convert maturing mortgages exceeding a lending limit, or the loan-to-value ratio, into credit loans instead of retrieving them. The LTV ratio is one of the main tools to curb household loans by restricting the maximum amount of money

Aug. 1, 2012

KDB drops plan to buy HSBC retail branches

The Korea Development Bank said Tuesday it dropped the plan to take over HSBC’s 11 retail branches in Korea. KDB said in a statement that it agreed with HSBC to stop acquisition talks due to disagreements over employment conditions, and to no longer seek to buy the U.K.-based bank’s retail operations here.The state-run bank had begun talks with HSBC in April to acquire its local retail branches in the form of purchase and assumption, which does not involve a transfer of money as KDB was to take

July 31, 2012

Card firms earn over 2tr won in peripheral services

Korean credit card firms earned more than 2 trillion won ($1.76 billion) from their secondary businesses last year as they scrambled to diversify profit sources, industry data showed Tuesday.The card issuers’ combined revenue from insurance sales, travel agency business and mail orders reached 2.45 trillion won in 2011, up 36 percent from 1.84 trillion won a year earlier, according to the data by the Korea Credit Finance Association. Their ancillary revenue has grown five-fold in 10 years, with

July 31, 2012

Korea basks in exports of cultural products this year

Korea earned income by selling its cultural products and services this year on the back of the popularity of Korean culture in overseas countries, data by the central bank showed Tuesday.The account tracking exports and imports of cultural products and contents hit a record high of $30.1 million in May, compared with $12.5 million tallied in April, according to the Bank of Korea.The account also posted a surplus of a combined $72.7 million in the March-May period, marking the first time that it

July 31, 2012

Shares up on EU optimism

Korean stocks finished 0.8 percent higher Monday on optimism that European policymakers will take action to ease the debt crisis, analysts said. The local currency rose against the U.S. dollar.The benchmark Korea Composite Stock Price Index gained 14.63 points to close at 1,843.79. Trading volume was moderate at 333.1 million shares worth 3.8 trillion won ($3.3 billion) with gainers outpacing losers 425 to 367.“Investors are cheered by the highly anticipated moves of European leaders and are opt

July 30, 2012

Manufacturing sentiment for Aug. hits 3-year low

Korean manufacturers’ business confidence for August fell to a more than 3-year low as the eurozone debt crisis and China’s slowing growth cooled sentiment, the central bank said Monday.The index of manufacturers’ outlook on business conditions came in at 70 for August, down from the 81 recorded for July, according to a monthly survey by the Bank of Korea. The index measures manufacturers’ expectations for the coming month.The August figures marked the lowest level since the index reached 69 for

July 30, 2012

$15,000 hidden in oven goes up in smoke

An Australian woman burned 15,000 Australian dollars ($15,700) without knowing that her husband hid the money in oven without telling her. The man, who was not identified, hid A$15,000 he had made by selling his car, intending to use it to pay the mortgage. However, his wife did not know about this and destroyed the money when she turned on the oven to make chicken nuggets.“It was everything I had,” the man said.He said he thought it would be safe to put the money in the oven because nobody used

July 30, 2012

Business sentiment falls to 3-year low on euro crisis

Korea’s business sentiment for August fell to a three-year low due to growing concerns over a global economic slowdown sparked by the persistent European debt crisis, a poll showed Sunday.The monthly business survey index for the upcoming month came in at 82.7, the lowest point in more than three years since March 2009, when the figure stood at 76.1 amid the global financial crisis, according to the survey by the Federation of Korean Industries, the lobbying group for the country’s large busines

July 29, 2012

Shares look to ECB, Fed this week

Korean stocks are likely to be affected by European and U.S. policy measures next week as investors keep tabs on the European Central Bank and the U.S. Federal Reserve amid lingering worries over economic uncertainties, analysts said Saturday.The benchmark Korea Composite Stock Price Index rose 0.34 percent from a week earlier to end at 1,829.16 last week, with the market sinking to the 1,760 level at one point.On Wednesday, the main index slumped to an yearly low of 1,769.31 as concerns over Sp

July 29, 2012

‘New benchmark to cut lending rates’

New short-term Cost of Funds Index expected to shave 0.1 percentage point off interest ratesFinancial authorities are expected to announce a short-term Cost of Funds Index as the new benchmark interest rate for loans next month, which would lower the key lending rate by up to 0.1 percentage point.The government is overhauling the rate-setting system because a significant drop in issuances of certificates of deposit has made their rates of interest increasingly unrepresentative of general market

July 29, 2012

Seoul shares look to ECB, Fed next week

South Korean stocks are likely to be affected by European and U.S. policy measures next week as investors keep tabs on the European Central Bank and the U.S. Federal Reserve amid lingering worries over economic uncertainties, analysts said Saturday.The benchmark Korea Composite Stock Price Index rose 0.34 percent from a week earlier to end at 1,829.16 this week, with the market sinking to the 1,76

July 28, 2012

Woori Financial sale falls though

The sale of Woori Finance Holdings fell through on Friday as none of the expected bidders made a bid. The state-controlled financial company failed to be privatized as no one applied for the preliminary bids for the 57 percent government stake in Woori. KB Financial Group decided not to make a bid two days ahead of the deadline for preliminary bidding, and so did Kyobo Life Insurance, the Korean Federation of Community Credit Cooperatives, which had considered forming consortia for the bid, and

July 27, 2012

Shares jump 2.62% on ECB chief’s pledge

South Korean stocks rallied 2.62 percent Friday as cheering remarks by the European Central Bank chief offered investors a sense of reassurance against the persistent eurozone crisis, analysts said. The local currency gathered ground against the U.S. dollar.The benchmark Korea Composite Stock Price Index rose 46.69 points to close at 1,805.92. Trading volume was moderate at 393.4 million shares worth 4.54 trillion won ($3.95 billion) with gainers far outstripping losers 641 to 186.The ECB Presid

July 27, 2012