The Financial Services Commission said Friday that it has endorsed the establishment of JB Financial Group, which will be headquartered in North Jeolla Province.The financial group will act as the parent unit of Jeonju City-based Jeonbuk Bank. Jeonbuk Bank had said it was considering a transformation into a financial holding company in a bid to boost its competitiveness through more integrated business of affiliates.The provincial bank also said it was reviewing the shift for the long haul in a

Feb. 22, 2013

The Financial Supervisory Service is considering taking punitive measures against Ergo Daum Direct, an online auto insurance firm, for fabricating the ratio of insurance payouts to premiums ― also called loss ratio.Though FSS officials said they have yet to decide on the sanction level, there is a high possibility that the insurance firm will be issued an institutional “warning” or “caution” by the regulator.But the punishment is not expected to deal a heavy blow to the insurance firm’s business

Feb. 22, 2013

Investigations into Shinhan Financial Group by the prosecution and the financial regulators over a series of alleged wrongdoings may damage the lender’s credit rating this year, market insiders said Wednesday. They said Shinhan Financial would have to be wary of another downgrade in its credit rating this year, following a case from its embezzlement scandal in 2010.Their negative outlook on Shinhan Financial ― though it posted the highest earnings among Korea’s financial firms last year ― is bas

Feb. 20, 2013

The nation’s leading cyber-settlement provider recently informed its some 17 million customers of the growing risk of their accredited certificates being stolen for financial fraud.The figure accounts for around 75 percent of Korea’s financial consumers who hold Internet banking accounts.In an email to consumers, the Korea Financial Telecommunications & Clearings Institute said that Internet banking users should be particularly cautious about a “new type of phishing” scam.KFTC said the practice

Feb. 19, 2013

The distressed savings bank industry is expected to face another round of business suspension for some players, as the overall secondary banking sector saw its financial status worsen last year.According to the Financial Supervisory Service, four of the 16 savings banks that publicized their 2012 financial statements declared “entire” capital erosion.The four banks in complete capital impairment, whose equity levels fell below zero under heavy losses, were Hyundai Swiss, Shilla, Youngnam and Woo

Feb. 17, 2013

Foreign banks operating in Korea appear to have scrapped their plan to offer more generous dividend payouts to main shareholders in the face of alleged opposition from the nation’s regulatory officials.Among the lenders are Standard Chartered Bank Korea and Citibank Korea, according to the Financial Supervisory Service.“Paying huge dividends to main shareholders ― more specifically to their parent groups in the U.S. and U.K. ― is spurring concerns about massive capital outflow and the local unit

Feb. 14, 2013

A government-led task force plans to seek close coordination with global rating agencies in a bid to prevent Korea’s credit status from being downgraded in the wake of North Korea’s nuclear test.The task force is drawing up contingency plans to effectively weather the North’s provocation and held an emergency meeting early on Wednesday.The task force is composed of senior officials from the Finance Ministry, the Financial Services Commission, the Financial Supervisory Service and the Bank of Kor

Feb. 13, 2013

Prosecutors have again placed former Shinhan Financial Group chairman Ra Eung-chan under investigation for his alleged embezzlement into a slush fund.The prosecution recently launched an investigation into the allegation that a slush fund totaling 300 million won ($278,000) ― fostered by Ra ― was offered to then-lawmaker Lee Sang-deuk, brother of President Lee Myung-bak, in 2008.The allegation was made by civic group Solidarity for Economic Reform that Ra had ordered Shinhan Bank’s then-CEO Lee

Feb. 12, 2013

The nation’s financial regulator is poised to reprimand Citibank Korea for having been negligent in consumer protection.Officials at the Financial Services Commission are fine-tuning the draft on a sanction against the local unit of U.S.-based Citigroup, which was created by the Financial Supervisory Service.The FSS, an executive arm of the FSC, has already decided to issue a “cautionary warning” on Citibank Korea CEO Ha Yung-ku and an “institutional warning” on the commercial lender.Consumers s

Feb. 11, 2013

Three major foreign cigarette producers in Korea have yielded some of their market share to Korean brand KT&G, following their hike of prices for their products.According to cigarette industry data, the three players ― Philip Morris, British American Tobacco and Japan Tobacco International ― posted 35.3 percent in combined market share in January, down from 40.4 percent from a year before.Philip Morris reported a drop from 22.7 percent in January 2012 to 19.3 percent in January 2013. The shares

Industry Feb. 11, 2013