The Korea Times

Shinhan faces uncertain future on internal feuding

Korean-Japanese shareholders urge Shinhan to postpone board meeting Shinhan Financial Group has been regarded as one of the most competitive and well-established financial services companies here. Following the global financial crisis, it has further set itself apart from its peers by successfully weathering the unprecedented financial turmoil. Shinhan’s success has been credited mainly to the management’s leadership based on sound corporate governance structure. Its governance structure has often been picked as a role model for other financial firms. While other financial groups, such as KB and Woori, often experienced ups and downs due to the bureaucratic control, Shinhan has managed to avoid being swayed by external forces under the solid governance structure led by a troika _ Shinhan Financial Group Chairman Ra Eung-chan, Shinhan Financial Group CEO Shin Sang-hoon and Shinhan Bank CEO Lee Baek-soon. However, the abrupt legal action by Shinhan Bank, the flagship of the financial group, against its former CEO Shin, suggests that its seemingly-sound governance structu

Sep 5, 2010By Kim Jae-kyoung

Companies

Shinhan CEO accused of embezzlement

By Kim Jae-kyoung Shinhan Financial Group CEO Shin Sang-hoon has been accused of embezzlement, and will soon be dismissed at a board meeting, Shinhan Bank, the flagship of the financial group, said Wednesday. In a news release, the lender said it found that the CEO and six senior bank managers committed breaches of duty and embezzlement, while Shin was at the helm of the bank. “We have investigated the case after receiving complaints regarding the lending extended to CEO Shin’s relatives and found that he breached his duty in handling 95 billion won worth of loans,” a Shinhan Bank official said. “Also, he was discovered to have embezzled 1.5 billion won, which was uncovered while verifying rumors circulating in the bank,” he added. The group said that since Shin is unable to fulfill his duty due to the accusations, the financial group will soon hold a board meeting to remove him from the CEO post. “Since there are a couple of outside directors residing in Japan, it will take several days to hold a board meeting. Since most accusations have already been confirmed by

Sep 2, 2010By Kim Jae-kyoung

Companies

Korea to enter correction period

By Kim Jae-kyoung A slowdown in major economies, such as the U.S. and Europe, will hamper growth of the Korean economy, according to a global economist. In an interview with The Korea Times, Patrick Artus, chief economist of NATIXIS, one of the major banks in France, said that Korea’s fast economic recovery will lose momentum in the next few quarters. “Korea remains a country that is very exposed to external demand and as such it will suffer significantly from the fall in demand from Europe and the U.S. Moreover, domestic demand perspectives are still uncertain due to the persistence of strong leverage of the private sector, especially the household sector,” he said. “Although we remain fundamentally optimistic on the role of domestic demand in the medium term we see the possibility of further adjustment in the short term that would hamper growth in the next few quarters,” he added. “Of course we just hint at a slowdown for Korea in the next few quarters, not a new recession.” He stressed that the Bank of Korea (BOK) should keep the key interest rate low as the economy

Aug 31, 2010By Kim Jae-kyoung

Companies

Economic recovery losing steam

By Kim Jae-kyoung Amid renewed fears of a double dip recession abroad, the Korean economy is showing signs of losing steam, with data indicating an eventual slowdown in economic growth. The bleak report came as Asia’s fourth largest economy is increasingly exposed to downside risks due to sluggish external demand caused by slowing U.S. and Chinese economies, a prolonged slump in the property market and rising raw material costs. Businesses have turned pessimistic about the economic condition, with the manufacturers’ business confidence falling in August for the second consecutive month due to lingering woes abroad. The Bank of Korea (BOK) reported Tuesday that the manufacturers’ business survey index stood at 98 for August, down from 103 in July. The index measures manufacturers’ assessment of current business conditions. It declined below the benchmark 100 for the first time in five months. “Signs of the slowing global economy hampered overseas demands for Korean goods for this month,” a BOK economist said. The index measuring exporters’ business conditions declin

Aug 31, 2010By Kim Jae-kyoung

Companies

Will MB continue to zigzag between growth, distribution?

By Kim Jae-kyoung Time flies. Two and a half years have passed since President Lee Myung-bak took office in February 2008. Today is the exact midway point of his presidency. For Lee, the first half of his tenure must be bittersweet as his first-half economic scorecard is mixed with praise and criticism. His presidency did not take off properly as economic policies were distracted by a series of mishaps, such as candle-light demonstrations and a global financial crisis. He had to give up his ambitious “747 Plan,” the gist of MBnomics, and instead focused on saving the country from the crisis. His growth-oriented policies successfully steered the economy onto a path of recovery but they have begotten unwanted side effects, widening the economic polarization. His economic policies are now seeking to maintain a balance between growth and distribution. Swift policy response Lee has been praised for a timely policy response to the global crisis, which many believe helped the Korean economy recover at the fastest pace in the world. He maneuvered aggressive economic pol

Aug 24, 2010By Kim Jae-kyoung

Companies

Shinhan top in productivity

By Kim Jae-kyoung Shinhan Bank ranked the highest in productivity among local lenders in the first half of this year on the back of a robust business performance based on preemptive risk management. According to data based on first-half business results from banks, eight major lenders _ Kookmin, Shinhan, Woori, Hana, Korea Exchange Bank (KEB), the Industrial Bank of Korea (IBK), SC First and Citibank Korea _ saw their per capita net profit nearly double to an average of 40.26 million won. Per capita net profit, an indicator of productivity, is determined by dividing total net profit by the number of employees. Eight banks, with a total payroll of 91,609, marked combined net profit of 3.68 trillion won in the first half of the year. By bank, per capita net income for Shinhan, the nation’s third largest lender by assets, reached 73.48 million won between January and June, well above the industry average and 10 times greater than that of Kookmin, which posted only 6.67 million won due to losses in the second quarter. KEB came in second with 71.82 million won, followed by

Aug 23, 2010By Kim Jae-kyoung

Others

Seoul to bring G20 leaders’ attention to green growth

By Kim Jae-kyoung The global economic crisis triggered by the U.S. subprime mortgage meltdown has steered the global economy in a new direction, forcing many countries around the world to follow a new expansion paradigm, ``green growth.'' For sustainable and balanced development, governments in major countries have come up with green initiatives to get the upper hand in the new area, which they believe will determine the future of their economies. However, there has been slow progress in reaching a global consensus on the issue due to different perspectives between developed and emerging countries. Against this backdrop, Korea is seeking to take an initiative in coming up with workable solutions at the G20 Seoul Summit by tabling the agenda to the business summit table. In an interview with The Korea Times, Young Soo-gil, chairman of the Presidential Committee on Green Growth, said, “The agenda for the summit will be crowded with other issues of pressing priorities to allow much discussion on green growth. The Korean G20 Summit Preparatory Committee is aiming for mainstre

Aug 22, 2010By Kim Jae-kyoung

Others

Korea’s experience to help bridge G20 development gap

This interview is part of articles highlighting Korea’s preparations for the Nov. 11-12 G20 Summit slated for Seoul, marking 80 days before the summit. — ED. By Kim Jae-kyoung Despite the Korean government’s efforts to generate meaningful agreements at the G20 Seoul Summit slated for Nov. 11 and 12, many are raising doubts about the outcome of the gathering as they believe that it is impossible to find middle ground on some thorny issues, such as IMF reform, climate change and development issues. Ranking officials at the Presidential Committee for the G20 Summit agreed that there were difficulties in bridging the gap between advanced and developing countries. They said that developed countries agreed on the need for change but they become very stubborn when going into the details. A noted economic and finance expert stressed that Korea should capitalize on its own development experience in order to bridge the perspectives between the two groups of countries and make the first G20 meeting in a non-G7 nation successful. “The ultimate challenge for the G20 Summi

Aug 22, 2010By Kim Jae-kyoung

Seoul to bring G20 leaders’ attention to green growth

Companies

Korea becomes less popular among foreign equity investors

By Kim Jae-kyoung South Korea has become less attractive to foreign equity investors among emerging markets, with more global funds flowing into the so-called BRIC countries ― Brazil, Russia, India and China ― on the back of the rapid growth in those countries. According to the Korea Center for International Finance (KCIF), foreign investment in the local equity market reached $236 billion at the end of last year, well below China’s $408.4 billion and Brazil’s $376.5 billion. Russia and India are also catching up with Korea at a fast pace as investment in the two jumped to $171.7 billion and $93.4 billion, respectively. “Korea had been the sole leader among emerging markets until 2005 but it is now overtaken by China and Brazil as their economies have grown fast over the past decade,” KCIF Vice President Ahn Nam-ki said. Korea’s GDP was much bigger than those of India, Brazil and Russia but it was overtaken by Brazil and Russia in 2006 and by India in 2007. “It is natural that the capital market gets bigger in line with the growth of economic size. In that regard, i

Aug 18, 2010By Kim Jae-kyoung

Companies

BOK Governor hints at another rate hike

By Kim Jae-kyoung The nation’s top central banker reiterated Tuesday that the Bank of Korea (BOK) will tip the balance of its monetary policy in favor of price stability over economic growth, hinting at a further rate hike in the coming months. “Despite the bank’s recent rate hike, the current monetary policy stance is still viewed as highly accommodative, given the situation of the real economy such as the potential growth and inflation rate,” BOK Governor Kim Choong-soo said during his speech at a meeting hosted by the Seoul Financial Forum. “Although the policy rate has been adjusted upward, the scale of the increase in the interest rate was not very large. It is likely to have only a limited impact on the financial and housing markets and on the household and corporate sectors,” he said. His remarks came a few days after the central bank left its key rate untouched at 2.25 percent last Thursday. The central bank hiked its policy rate by 25 basis points to 2.25 percent in July after keeping it fixed for 16 months. Kim pointed out that the prolonged low interest rate

Aug 17, 2010By Kim Jae-kyoung

Kim Jae-kyoung

Read more

Shinhan faces uncertain future on internal feuding

Shinhan CEO accused of embezzlement

Korea to enter correction period

Economic recovery losing steam

Will MB continue to zigzag between growth, distribution?

Shinhan top in productivity

Seoul to bring G20 leaders’ attention to green growth

Korea’s experience to help bridge G20 development gap

Korea becomes less popular among foreign equity investors

BOK Governor hints at another rate hike

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