Banks Enjoy High Fee Income From Fund Sales
By Na Jeong-ju
Staff Reporter
Banks saw a sharp rise in income from the sale of funds on online and offline outlets last year as retail investors showed greater interest in indirect equity investments amid surging stock prices.
Kookmin Bank, the country's largest lender, reaped some 469 billion won in fee income from fund sales in 2007, up 97 percent from 238 billion won a year ago.
In the first quarter, it had some 90 billion won in income from fund sales and the figure increased to 103 billion won in the second quarter, 114 billion won in the third quarter and 162 billion won in the fourth quarter.
For the full year, the bank recorded 1.07 trillion won in total income from fees, up 9.9 percent from the previous year.
Shinhan Bank also saw its 2007 fee income from fund sales more than double from a year ago. Last year, the bank recorded 337 billion won in fund income, up 113 percent from 114 billion won in 2006.
As of the end of last year, the equity fund market grew 146.8 percent from a year ago to 114.7 trillion won ($122.6 billion), according to the Asset Management Association of Korea.
Analysts forecast the shift of funds from banks' deposit accounts to brokerage firms' stock investment accounts will continue this year despite rises in interest rates on deposits.
Financial firms are expected to market more investment-oriented products as more depositors will draw their funds out of bank accounts in pursuit of higher gains.
``Investors tend to rearrange their portfolios by increasing indirect investments in stocks, while decreasing their portion of deposits at banks,'' said Kim Hyung-chul, an official of Kookmin Bank's private banking division.