The Korea Times

FX feud puts won under upward pressure

By Kim Jae-kyoung, Kang Seung-woo The Korean won is likely to continue strengthening against the greenback via what’s been labeled a “currency war” between major countries, economists said. The local currency hit a five-month high on Monday against the U.S. dollar at 1,122.30 won, up from 111.5 won traded on May 4 after rising for seven straight days. The won gained more than 3 percent to the dollar in September alone. But the won rallied to close at 1,130.7 Tuesday, affected by news that the Bank of Korea (BOK) and Financial Supervisory Service (FSS) will launch a joint inspection on local banks handling foreign exchange businesses. The dollar has weakened amid efforts of major developed countries to curb the rising value of their own currencies and growing expectations for further quantitative easing steps taken by the United States. U.S. Congress approved a bill late last month which allows the United States to slap duties on goods from nations with what it claims are undervalued currencies, a move widely seen as laying pressure on China to appreciate the yuan.

Oct 5, 2010By Kim Jae-kyoung

Companies

Euh seeks to turn KB into Asian leader

By Kim Jae-kyoung KB Financial Group Chairman Euh Yoon-dae says that he intends to turn Korea’s leading banking group into Asia’s major player, somewhere between JPMorgan and Banco Santander. Domestically, he is pursuing a JPMorgan model, a universal banking style that combines investment and commercial activities, with the style of the prospering Spanish lender. “The reason I showed great interest in Woori is not its asset size but its extensive relationship with large businesses. If we took over Woori, we could become another JPMorgan, which I believe would be good for us,” Euh said during a recent interview with The Korea Times. His remarks can be interpreted as signs that he seeks to strengthen KB’s corporate banking segment by securing a balance between retail and wholesale banking while enhancing investment banking activities. Euh said he has no plans to push ahead with large-scale mergers and acquisitions (M&A) with major domestic players such as Woori within the next two years, as the group does not have the capability at the moment. He now has a differen

Sep 27, 2010By Kim Jae-kyoung

Companies

Shinhan ― case of CEO risk

Power game saps stock, reputation, whole nine yards By Kim Jae-kyoung Shinhan Financial Group Chairman Ra Eung-chan may now be breathing a sigh of relief, as the first round of a power game between him and CEO Shin Sang-hoon ended in his favor, with the group’s board of directors voting to suspend Shin from duty. However, the internal feud has yet to be completed and chances that Shin will return to his post are not being ruled out, depending on the outcome of the prosecution’s investigation against the former CEO of Shinhan Bank. No matter how the case will unfold, one thing that is obvious is this will be a losing game for everyone in the long run ― not only for Shin but also for Ra and Shinhan. It seems that the biggest victim from the internal dispute is the group’s shareholders as more than one trillion won in market capitalization has evaporated since the incident began. But Ra and the group itself are also expected to suffer from the aftermath of the internal feuding. With the incident, Shinhan lost its two key attributes that were the backbone of the group’s ra

Sep 15, 2010By Kim Jae-kyoung

Companies

Mirae gives clue to financial globalization

“It is very important to have two sets of eyes. With one pair to observe what is going on. With the other, foresee the future. To be an entrepreneur, you have to foresee the future.” ― Park Hyeon-joo, chairman and founder of Mirae Asset from a Harvard Business School case study this year. On April 22, an East Asian CEO appeared at Harvard Business School in Boston to give a lecture. It was not a regular class but a guest lecture designed to provide MBA students with some insight on “international entrepreneurship.” The one who stood at the podium of the prestigious center of higher education to share his experience with future business CEOs was Park Hyeon-joo, chairman and founder of Mirae Asset Financial Group, South Korea’s biggest and most successful asset manager. From April this year, the school used the history of the firm as a case study in the class titled “International Entrepreneurship,” with topics concerning the firm’s globalization strategy and the entrepreneurship of the nation’s mutual fund tycoon. The fact that Mirae was selected by Harvard signifies t

Sep 14, 2010By Kim Jae-kyoung

Companies

Shinhan to hold board meeting next Tuesday

By Kim Jae-kyoung, Kim Jae-won Shinhan Financial Group said Friday that it will hold a board meeting at its headquarters in Taepyeong-ro, Seoul, next Tuesday, to discuss the dismissal of its CEO Shin Sang-hoon for alleged involvement in embezzlement and inappropriate lending. “The agenda has yet to be decided but board members will discuss how to deal with various issues associated with the internal feud, including dismissing Shin,” a Shinhan spokesman said. Although Korean-Japanese shareholders decided to leave the matter to a board decision at an emergency shareholder meeting in Nagoya, Japan Thursday, a showdown vote is highly likely because the four Korean-Japanese outside directors are still against the group’s move to oust Shin even after the meeting. Group Chairman Ra Eung-chan and Shin are now engaged in a vote-collection campaign that will determine their fate. Depending on the outcome of voting, Ra and Shinhan Bank CEO Lee Baek-soon, as well as Shin, could be held accountable for the internal dispute. Market participants believe that Ra and Lee colluded to oust

Sep 10, 2010By Kim Jae-kyoung

Companies

Shinhan’s top 3 may face confidence vote

By Kim Jae-kyoung, Kim Jae-won The ball is now back in the court of the board of directors of Shinhan Financial Group as Korean-Japanese shareholders decided Thursday to leave a decision on the group’s internal feud up to at an emergency shareholder meeting at the Marriot Hotel in Nagoya, Japan. But with Chairman Ra Eung-chan, Shinhan Bank CEO Lee Baek-soon and group CEO Shin Sang-hoon failing to garner support from the Korean-Japanese, the case is not likely to be resolved anytime soon. Instead, all three are likely to face a confidence vote at the meeting, expected to be held early next week. If the scenario of the three stepping down at the same time actually happens, the group will face its biggest crisis since it was established in 1982, due to a collapse of its governance structure and a management vacuum. The group said that Korean-Japanese shareholders and outside directors, who own a 17-percent stake, have agreed to follow any boardroom decision to solve the internal feud triggered by the bank’s filing of criminal charges against CEO Shin for his alleged involvem

Sep 9, 2010By Kim Jae-kyoung

Companies

BOK to maintain tightening policy

By Kim Jae-kyoung, Kim Jae-won The central bank surprised the market Thursday by freezing the key interest rate at 2.25 percent but its chief said that it will continue to maintain the credit-tightening mode to normalize monetary policy, hinting that an additional rate hike will come in the coming months. Bank of Korea (BOK) Governor Kim Choong-soo made the remarks after he and his fellow policymakers froze the benchmark rate for the second consecutive month on growing concerns over the slowing global economy and sluggish real estate market. “The Korean economy is expected to continue its solid growth thanks to robust exports and recovery in consumption and facility investment," Kim said in a press conference held at the main office of the BOK in downtown Seoul. However, the possible economic slowdown in other major economies and the euro-zone debt crisis will act as downside risks to growth.” He also said that the real estate market is one of the most important parts of the domestic economy, suggesting that it was one of the factors that prevented the central bank

Sep 9, 2010By Kim Jae-kyoung

Companies

Decoupling gives BOK leeway for rate tightening

By Kim Jae-kyoung Emerging economies, including Korea and China, are getting closer to decoupling themselves from the Western economies, with the region becoming less reliant on trade with the West on the back of rising domestic demand, according to the Bank of Korea (BOK) Wednesday. The “decoupling” debate has opened up again, as the U.S. economy has shown signs of slipping back into a slump, while emerging economies have continued robust growth. Analysts say that the decupling is expected to give more leeway for the BOK to maintain tightening policy despite lingering uncertainties abroad. BOK Governor Kim Choong-soo was the one who reopened the debate here. At a recent economic forum, the top central banker said, “The Korean economy will continue its robust growth despite lingering uncertainties triggered by a slowdown in the U.S. economy.” In its latest report Wednesday, the central bank supported Kim’s such views, forecasting that the global economy will go more on decoupling. “Coupling between Asian and advanced economies, such as the U.S. and Europe, will lose momen

Sep 8, 2010By Kim Jae-kyoung

Companies

Top 3 to head to Japan

By Kim Jae-kyoung Shinhan Financial Group said Wednesday that its chairman Ra Eung-chan, CEO Shin Sang-hoon and Shinhan Bank CEO Lee Baek-soon will fly to Nagoya in Japan to give to Korean-Japanese shareholders a briefing about the internal feuding triggered by the bank’s criminal filing against Shin for alleged involvement in embezzlement and inappropriate lending It added that both the group and Shin will separately have a chance to explain their stance about the accusation and seek to garner the support from Korean-Japanese, who have a combined ownership of 17 percent in the group and hold the casting vote to hold a board meeting and dismiss Shin. “Korean-Japanese shareholders and outside directors will meet in Nagoya to listen to explanations from both sides and discuss dismissal of Shin,” a Shinhan spokesperson said. “The bank will give a full explanation about why it referred Shin to the prosecution. If it suggests mediation by proposing a suspension of Shin’s duties, they will also discuss the issue,” he added. “The date for a board meeting will be announced after

Sep 8, 2010By Kim Jae-kyoung

Companies

Despite presidents fair society pitch, income divide worsens

By Kim Jae-kyoung Despite President Lee Myung-bak’s campaign for a “fair society,” the nation’s income divide has been deepening following the global financial crisis, with the debt for the middle- and lower-classes having outgrown their income at a much faster pace than wealthy households. The nation’s Gini coefficient, a barometer for the degree of income inequality, has also been rising, signaling that the income gap between the rich and poor has been widening According to the Bank of Korea (BOK) and Statistics Korea Monday, the outstanding balance of household debt reached 711.6 trillion won in June, equivalent to 64 percent of the nation’s gross national disposable income (GNDI) of 1,117.1 trillion won. The figure was up 10 percentage points from 54 percent in June 2003, meaning that household debt has outgrown income over the past several years. The debts to GNDI ratio has been steadily rising to 61 percent in 2008, 60 percent in 2007, 59 percent in 2006, 56 percent in 2005 and 55 percent in 2004. It is natural that debts increase in line with a growth in econ

Sep 6, 2010By Kim Jae-kyoung

Kim Jae-kyoung

Read more

FX feud puts won under upward pressure

Euh seeks to turn KB into Asian leader

Shinhan ― case of CEO risk

Mirae gives clue to financial globalization

Shinhan to hold board meeting next Tuesday

Shinhan’s top 3 may face confidence vote

BOK to maintain tightening policy

Decoupling gives BOK leeway for rate tightening

Top 3 to head to Japan

Despite presidents fair society pitch, income divide worsens

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