Nonlife insurers’ operating profit falls in 2011

Korean nonlife insurers saw their operating profit shrink for two straight fiscal years, largely due to hefty damage payouts from overseas businesses, the financial regulator said Tuesday. The combined insurance operating profit of 16 local nonlife insurers reached 147.6 billion won ($128.2 million) in fiscal 2011, slightly down from 155.0 billion won a year earlier, according to the Financial Supervisory Service. The tallied insurance firms close their books on March 31. Fire insurance saw thei

July 17, 2012

Card firms’ Q1 profits reach nearly 1tr won

Korean credit card companies saw their net profits nearly double in the first quarter from three months earlier, as more people favored cards for their transaction convenience and benefits, data showed Tuesday.The combined net profits of seven credit card firms reached 921 billion won ($804 million) in the January-March period, compared with 481 billion won in the previous quarter, according to industry data. No. 2 player Samsung Card Co. logged a profit of 509 billion, followed by industry lead

July 17, 2012

Rate cut won’t squeeze bank income

Last week’s surprise interest rate cut by South Korea’s central bank will unlikely erode local lenders’ interest income significantly and will instead help improve their asset quality, a report said Tuesday.Beating market expectations, the Bank of Korea unexpectedly lowered the July level of the benchmark 7-day repo rate by a quarter point to 3 percent on Thursday, marking the first rate cut since February 2009.According to the report by Switzerland-based brokerage Credit Suisse, the rate reduct

July 17, 2012

Finance minister rules out additional fiscal stimulus

Korean Finance Minister Bahk Jae-wan ruled out additional fiscal stimulus for now, saying it could do more harm than good because the global economy is too weak to make it meaningful. “You don’t plant a tree in winter,” Bahk said in an interview with Bloomberg on Monday. While Asia’s fourth-largest economy retains room to boost growth both through monetary and fiscal measures, 3 percent growth “is not bad, given the global economy,” he said. Gross domestic product rose 2.8 percent in the first q

July 17, 2012

Shares up on stimulus hopes

Korean stocks closed 0.23 percent higher on Tuesday as hopes for further stimulus measures outweighed concerns over slowing growth in major economies, analysts said. The local currency gained against the U.S. dollar.After opening lower, the benchmark Korea Composite Stock Price Index climbed 4.17 points to 1,821.96. Trading volume was moderate at 406.5 million shares worth 4.7 trillion won ($4.1 billion), with decliners outnumbering gainers 439 to 356.“Despite the International Monetary Fund’s g

July 17, 2012

KB makes bids for ING Life’s local unit

KB Financial Group Inc. submitted a bid Monday to acquire the local unit of global insurance giant ING Group, as the group scrambles to expand its presence in the fast-growing insurance market, industry sources said. Korea’s No. 2 banking group made its bid to buy ING Life Korea, the fourth-largest in the country by market share, in a deal worth of around 3.5 trillion won ($3.04 billion), according to sources.AIA Group, the multinational life insurer, is also believed to have submitted a bid for

July 16, 2012

Shares up on eased concerns

South Korean stocks rose 0.27 percent on Monday as investor sentiment was boosted by growing expectations over a global recovery and corporate earnings forecasts, analysts said. The local currency gained ground against the U.S. dollar.The Korea Composite Stock Price Index climbed 4.9 points to finish at 1,817.79. Trading volume was light at 263.5 million shares worth 3.2 trillion won ($2.8 billion), with losers slightly outpacing gainers 408 to 407.“Investors are relieved by China’s not-so-bad e

July 16, 2012

Household, public debts pose risks: S&P

Korea’s rising household and public debts could pose downside risks for its sovereign credit rating, a global credit appraiser forecast on Monday. Standard & Poor’s said the rate of Korea’s indebtedness to its disposable income has been rising, with the debt of non-banking public institutions growing rapidly since 2008.“Household debts continue to grow and it could complicate monetary policy for the central bank ... (and place it) in a difficult position to have to allow inflationary pressure, w

July 16, 2012

Hana Financial net down 54%

Hana Financial Group Inc., South Korea’s No. 4 banking group, said Monday its second-quarter earnings fell 54 percent from a year earlier due mainly to the absence of a one-off stake gain.Net income came to 225.1 billion won ($196.2 million) in the April-June period, compared with 489.8 billion won the previous year, said the group, which competed to buy the Korea Exchange Bank in February.Hana Financial’s net profits include KEB’s earnings results.In the second quarter of 2011, the group posted

July 16, 2012

Foreign financial firms using dividends to transfer wealth overseas

Foreign investment banks and asset management companies are paying huge dividends that surpass their net profits or remitting a large amount of profit to their headquarters overseas. Standard Chartered Bank Korea paid a dividend of 100 billion won ($87.1 million) this year to Standard Chartered Korea, the 100 percent shareholder of the bank. Dividend per share was 381 won. The dividend was the same amount as last year although the bank’s net profit decreased by 21 percent to about 255 billion wo

July 16, 2012

Samsung, KB Asset see more rate cuts

South Korea’s biggest bond investors expect the Bank of Korea to lower borrowing costs again this year, as Thursday’s unexpected cut signals the nation’s economy has deteriorated.The Bank of Korea unexpectedly reduced the benchmark seven- day repurchase rate to 3 percent from 3.25 percent, the first cut since February 2009, it said in a statement today in Seoul. Only two of 16 economists surveyed by Bloomberg News predicted the move, while the rest expected no change.Samsung Asset Management Co.

July 15, 2012

Seoul bourse likely to attempt rebound this week

Korean stocks are expected to move upward this week, trying to make up for the sharp losses seen in the last seven days, analysts said. The benchmark Korea Composite Stock Price Index tumbled 3.2 percent from a week earlier to finish at 1,812.89 this week, as investors opted to sell off shares on disappointing U.S. employment data and a hike in borrowing costs for Spanish debts. The main index plunged as low as the 1,780 mark on Thursday after the central bank lowered its key rate for the first

July 15, 2012

Six out of ten paid by card in Q1

Payment by credit card surpasses 60% for first time while card issuances dropPurchases made by credit card surpassed 60 percent of all purchases made in the first quarter for the first time. Korea’s Credit Finance Association announced on Sunday that payment by credit card reached 63.3 percent in the first quarter. It means that most purchases were done by credit cards, said the association, probably excluding small amounts below 2,000 won paid in cash. The ratio increased almost three-fold from

July 15, 2012

Money circulation stiffens

Despite the government’s various monetary policy measures including the key interest rate cut to 3 percent, money circulation is slowing more than ever in Korea, reports showed. According to the Bank of Korea, money multiplier, the core indicator used to assess circulation levels, dropped to 21.9, it’s lowest point in the past decade. Money multiplier is the ratio of the volume of the money and substitutes in circulation to the volume of actual money supplied by the central bank. A decrease in t

July 15, 2012

BOK cuts GDP outlook to 3%

South Korea’s central bank said Friday that it has revised its projection on the nation’s GDP growth rate for 2012 to 3 percent.The figure is lower than the Bank of Korea’s earlier prediction of 3.5 percent in April and 3.7 percent in December 2011.The BOK’s GDP outlook is even bleaker than that forecast by the Finance Ministry last month, which was 3.3 percent. In its “Economic Outlook for Second Half of 2012,” the bank said that growth levels are projected to be 2.7 percent for the first half

July 13, 2012

Foreign IBs eye another rate cut within year

Major foreign investment banks expect South Korea to cut its key interest rate one more time within the year to buttress the faltering economy weighed down by the eurozone jitters, a report showed Friday.Foreign IBs, including Nomura and HSBC, predict the central bank to slash the benchmark rate by 0.25 percentage point to 2.75 percent as early as September or by the end of this year at the latest, according to the report by the Korea Center for International Finance.The Bank of Korea on Thursda

July 13, 2012

LPG vehicle sales soar on high gas prices

Sales of cars fueled by liquefied petroleum gas surged 20 percent in the first five months of this year mainly due to high gasoline prices, a report showed Friday.According to the Korea LPG Association report, sales of cars that run on the liquefied mixture of propane, butane and other chemicals, reached 76,209 units in the cited period, up from 63,303 an year earlier.In contrast, sales of gasoline-powered cars dropped 15 percent on-year to 286,922 units, while diesel car sales remained virtuall

July 13, 2012

Minister urges public firms to restrain price increases

Public companies providing exclusive services should be cautious when making price hike decisions and consider possible effects such action could have on inflation and the overall economy, South Korea’s top economic policymaker said Friday.“Public companies, unlike private ones, usually provide exclusive services. They have to make decisions (on prices) by taking into consideration their ripple effect on the whole economy,” Finance Minister Bahk Jae-wan told an anti-inflation meeting.He admitted

July 13, 2012

Shares rise on better-than-expected data

South Korean stocks jumped 1.54 percent on Friday as investors were relieved by China’s not-so-bad economic data and optimistic about a further rebound, analysts said. The local currency gained ground against the U.S. dollar.The Korea Composite Stock Price Index climbed 27.5 points to finish at 1,812.89, snapping a five-day decline. The main bourse plunged more than 40 points during the previous session.Trading volume was moderate at 344.2 million shares worth 4.67 trillion won ($4.06 billion),

July 13, 2012