 The headquarters of Korean securities companies in Yeouido, Seoul, are shown in this September file photo. The wealthy who own more than 1 billion won in financial assets hold 30 percent of total banking deposits, according to Mirae Asset Financial Group and the Bank of Korea. Korea Times |
By Kim Jae-won
The number of "superrich," or high net-wealth individuals with financial assets worth 1 billion won ($840,000) or more topped 130,000 with the combined aggregate figure estimated to reach 324 trillion won.
The superrich don’t entirely correspond to the richest 1 percent targeted by those leading the “Occupy Wall Street” demonstrations as the cause of the income imbalance, triggering similar protests around the world.
The figures appear to reflect the current economic situation where the depressed property market is moving investments away from housing and land to financial assets that are more liquid.
The 324 trillion won is equal to the size of national pension fund’s assets at the end of 2010, and accounts for about 30 percent of gross domestic product, or a third of 938.9 trillion won in total bank deposits as of October this year.
The figures were tallied by Mirae Asset, one of the leading financial groups, on the basis of data available from the Bank of Korea.
Mirae said the number of superrich was based on two assumptions. First, bank deposits account for 40-50 percent of a person’s total financial assets so about 84,000 individuals with deposits of over 500 million won were included in their number.
Second, about 10 percent of those who hold deposits of 100 million won to 500 million won were also included.
Experts say that frozen real estate market drove the wealthy to invest their assets in financial products.
The real estate market had been regarded as the best way to increase wealth, but it is now seeing a big slump after the 2008 global financial crisis and lingering economic growth.
As the number of superrich increases, financial companies such as banks, brokerages and life insurers fiercely compete to offer wealthy customers a wide range of services from portfolio management, taxation and legal tips to matchmaking opportunities between well-off families.
For example, Shinhan Financial, the country’s No. 3 banking group, launched its first private wealth management branch in downtown Seoul last week to cope with changing financial circumstance.
Financial institutions expect explosive growth in the country’s private banking and asset management markets, which have so far remained underdeveloped due to Korea’s regulatory system.
“Financial companies need to brace for the rising rich with new marketing strategies,” said Jang Gyeong-ho, a spokesman at Mirae Asset.
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