The Korea Times

Bank branches will face random checks

Regulators move after a series of ‘financial incidents’ By Kim Jae-kyoung Staff reporter Branches of local banks are facing random inspection from financial regulators as the Financial Supervisory Service (FSS) has taken steps to beef up its on-site audits in a bid to prevent financial wrong doings. The move came after local banks, over the past year, have been involved in a series of financial embezzlements, money laundering, leaks of customer information and irregular sales of financial products. Since 1997, the financial watchdog has mostly conducted its inspection against head offices of banks as part of deregulation efforts. However, the FSS decided to change its stance by strengthening on-site audits against bank branches following a series of incidents there. For these inspections, the FSS has launched a task force consisting of officials from the bank supervision department. It said that the task force focused mostly on policing irregular business practices, such as misleading sales, in the first half of the year, but it plans to concentrate on preventing fin

Jul 8, 2010By Kim Jae-kyoung

Companies

Unions in unison against merger plan

By Kim Jae-kyoung Staff reporter Labor unions of local banks have joined forces to thwart any efforts to create a mega bank through mergers and acquisitions (M&A), threatening to stage a general strike once the government pushes for an M&A just to enlarge the size of banks. At a joint press conference led by the unions of Kookmin and Woori Bank Tuesday, the Korea Financial Industry Union (KFIU) said that a mega bank plan could hamper the health of the financial industry and trigger another crisis by increasing system risks. The move came two weeks after Euh Yoon-dae, the final nominee for chairman of the KB Financial Group, unveiled his scheme to create a mega bank by merging Kookmin Bank, the flagship of the group and the largest in Korea by assets, with Woori Bank, the nation's second largest lender. "The privatization of Woori Financial is expected to be carried out in a form of block sale or M&A with other financial groups," KFIU leader Yang Byong-min said during the conference. "If the two lenders merge, the new entity will control more than half of the domestic

Jul 7, 2010By Kim Jae-kyoung

Companies

Next KB Bank chief likely from inside

By Kim Jae-kyoung Staff reporter With Kookmin Bank CEO Kang Chung-won tendering resignation, Euh Yoon-dae, the nominee for the chairman of KB Financial Group, is expected to name Kang's successor next week as soon as he takes the helm of the nation's largest financial group on July 13. He is expected to be confirmed as the KB head at a shareholders' meeting that same day. For Euh, appointing the new head of the group's flagship bank is the most urgent task to minimize the management vacuum at the nation's largest lender and put the group back on track as early as possible. KB Financial has been reeling from the global financial crisis. Its plan to become Asia's leader by strengthening its non-banking sector has been put on the shelf after the chairmanship has remained vacant for nine months following former chairman Hwang Young-key's resignation. There are many names on the lips of people both inside and outside the group but the list may be narrowed down to only a few given that there are two important factors that Euh may well prioritize in the selection process. Fi

Jul 7, 2010By Kim Jae-kyoung

Companies

FKI chief resigns for health reasons

By Kim Jae-kyoung Staff reporter Federation of Korean Industries (FKI) Chairman Cho Suck-rai has resigned from the top post of the nation's largest business lobby for health reasons, the FKI said Tuesday. His term was to expire in February next year. An FKI representative said that the 75-year-old has been trying to recover from surgery he underwent last month to remove a tumor from his gallbladder. "I have been trying to do my best to fulfill my role representing the business circle. But it is regretful that I am unable to serve my tenure because of health reasons," Cho said in a letter to FKI members and officers. "I hope that the FKI will continue to play a key role in boosting the Korean economy," he added. In March 2007, Cho, concurrently chairman of Hyosung Group, a mid-size conglomerate, took office at the FKI. In 2009, he extended his tenure for another two-year term at the lobby group, which represents the country's largest conglomerates. The representative said the FKI will call a board meeting soon to elect a new chief. It remains to be seen whet

Jul 6, 2010By Kim Jae-kyoung

Companies

Global economy to drag on Korea

By Kim Jae-kyoung Staff reporter A noted global consultant said that Korea should keep its key interest rate at the record low level for the time being to ensure a sustainable economic recovery, citing the global economy, a rapid rebound of the won and household debt as the biggest obstacles to the Korean economy. His advice comes amid concerns growing over a double-dip recession of the global economy after the triple tremors from the banking crisis in Spain, crumbling confidence in the U.S. and a setback in China's leading economic indicator has jolted the global market. "Korea is generally in good shape. The exception is that household debt levels are still high. Keeping interest rates low should reduce the risk from debt levels and also the risk that the won rebounds too fast," Richard Dobbs, director of The McKinsey Global Institute, told The Korea Times. The institute is McKinsey's business, economics, and technology research arm, and is funded by the partners of McKinsey & Company. "The government needs to ensure the won does not rebound too fast against the Chi

Jul 1, 2010By Kim Jae-kyoung

Companies

Will Hyundai Motor take over Hyundai Construction?

Hyundai Motor’s chance of merging with top construction firm is ‘50-50’ By Kim Jae-kyoung, Kim Tong-hyung Staff reporters Will Hyundai-Kia Automotive Group take over Hyundai Engineering and Construction? Some Hyundai Motor officials say that the chances are fifty-fifty, while its spokesman said there was no chance at all. If a reason to deny the rumors is needed, the stock market offered it. Hyundai Motor stock prices tanked after reports about the company's keen interest in the construction firm. "It is an old story that Hyundai Motor is interested," one source said. "The chance is fifty-fifty." Industry sources said Thursday, Hyundai Motor Group Chairman Chung Mong-koo, eldest surviving son of the late Chung Ju-young, the founder of Hyundai Group, is seriously considering taking over the construction company, the starting enterprise of the Hyundai business empire. They said that Chung recently held a meeting with his brother Mong-joon, the largest shareholder of Hyundai Heavy Industries, and uncle Sang-young, chairman of KCC Group, and reached an agreemen

Jul 1, 2010By Kim Jae-kyoung

Companies

BOK having 2nd thoughts on rate raise

BSI hits 8-year high, industrial output grows for 11th month By Kim Jae-kyoung Staff reporter A week ahead of a monetary policy committee meeting slated for July 9, Bank of Korea (BOK) Governor Kim Choong-soo and his rate-setting colleagues may feel embarrassed by the renewed woes over a double-dip recession abroad. With a series of indicators pointing to a sustainable economic recovery, the top

Jun 30, 2010By Kim Jae-kyoung

Companies

KoreaToday From war-torn nation to economic powerhouse

Korea set to leverage G-20 summit to become global trendsetter By Kim Jae-kyoung Staff reporter Since the end of the Korean war in 1953, South Korea has played the starring role in one of the world's greatest stories of rebirth by transforming a war-ravaged agrarian economy into a manufacturing powerhouse. The outstanding transformation was the outcome of government policies aimed at mobilizing personal savings and directing bank lending to aid the construction of industries and businesses. Over the past 60 years until 2009, the nation's real GDP rose at the annual rate of nearly 7 percent. The growth of exports was even more impressive. In dollar terms, exports rose from a meager $28 million in 1952 to more than $400 billion in 2009. According to the Bank of Korea (BOK), following an average of 3.9 percent growth in 1950s, Korea enjoyed consistent high growth for nearly 40 years. The average GDP growth rate averaged 8.4 percent in 1960s, 7.4 percent in the 1970s, 8.6 percent in the 1980s and 6.2 percent in the 1990s. Entering the 21st century, the GDP growth s

Jun 29, 2010By Kim Jae-kyoung

Companies

Korea expected to get bigger say in IMF

By Kim Jae-kyoung Staff Reporter Beginning this year South Korea is expected to have a "bigger voice" in the International Monetary Fund (IMF) than Australia, after global leaders agreed to speed up reform on the IMF quota system at the G-20 summit in Toronto over the weekend. The final decision will be made by the next summit slated for November in Seoul. Currently, working-level officials of G-20 countries are discussing details on how the 5 percent quota of advanced countries will be re-distributed to developing ones. The IMF quota refers to money that a country which is a member of the IMF has to donate to the fund so that it can lend money to other countries needing help. It also determines a nations' voting power. According to the Ministry of Strategy and Finance and the IMF, Tuesday, Korea ranks 19th and has an IMF quota of 1.345 percent. The figure is considered very low, given the nation's economic size or GDP, which accounts for 2.176 percent of the total economic output by IMF member countries. Korea is still classified as an emerging economy. If the IMF gover

Jun 29, 2010By Kim Jae-kyoung

Companies

ERGO, AXA suffer from huge losses

By Kim Jae-kyoung Staff reporter Four local direct insurance companies ― those engaged in the sale of insurance policies mainly through phones or online ― suffered from huge losses last year due to worsening profitability caused by soaring loss ratios on auto insurance. According to industry sources Monday, combined net losses for the four ― ERGO Daum Direct Auto Insurance, AXA General Insurance, Hyundai Hicar Direct and The K Non-Life Insurance ― reached 30.2 billion won ($2.51 million) in 2009, compared with a $17.3 billion won shortfall in 2008. ERGO Daum is the Korean arm of ERGO Group, the subsidiary of Munich Re Group, one of the largest insurance groups in Europe, while AXA General is the subsidiary in Korea of AXA Group, one of the leading global financial firms based in Paris, France. By company, ERGO Daum posted the largest loss of 16.8 billion won, followed by Hicar Direct with a loss of 13.3 billion won and AXA Direct with a shortfall of 4.8 billion won. Only The K recorded a net profit of 4.8 billion won during the same fiscal year between April 2009 and Mar

Jun 28, 2010By Kim Jae-kyoung

Kim Jae-kyoung

Read more

Bank branches will face random checks

Unions in unison against merger plan

Next KB Bank chief likely from inside

FKI chief resigns for health reasons

Global economy to drag on Korea

Will Hyundai Motor take over Hyundai Construction?

BOK having 2nd thoughts on rate raise

KoreaToday From war-torn nation to economic powerhouse

Korea expected to get bigger say in IMF

ERGO, AXA suffer from huge losses

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