The Korea Times

Credit card firms under siege over fees

By Kang Seung-woo Credit card issuers currently have little room to breathe, as their clash over “swipe fees” on card payments with small restaurant owners is rapidly stretching to other sectors. Following the restaurant owners, gas stations, real estate agents, private institutes and even conglomerates are also pressing card firms to slash the commissions they have to pay. In October, small restaurant owners staged a rally against hefty card fees, accompanied by growing pressure from politicians, and achieved a commission cut. At that time, card companies announced they would lower the fees for small- and medium-sized enterprises earning less than 200 million won ($176,400) per year from over 2 percent to 1.8 percent early next year. Right after the agreement with small retailers, Hyundai Motor, the nation’s largest automaker, embarked on a war with credit card companies. The auto giant demanded issuers lower their fees by 0.5 percentage points to 1.7 percent, warning it would stop accepting credit cards for the sale of its cars unless the companies accept its demand

Dec 9, 2011By Kang Seung-woo

Companies

CEO paychecks may be subject to mandatory disclosure

By Kang Seung-woo The nation’s financial regulator said Thursday that it plans to make it mandatory to reveal what all executives at listed and financial holding firms earn in a move to offer a transparent look at high-profile executives’ salaries. Currently, listed companies have only to show the total paid to executives, not the individual amounts given to each one. “Like the United States and Japan, we are reviewing a move to force listed companies and financial holding firms to disclose the paychecks of each executive instead of the total amount,” said an official of the Financial Services Commission (FSC). Another official said that the issue is under review at a working level, but nothing has been decided yet. The financial authorities’ action comes as the official data cannot expose the salaries of the highest-ranking executives at the country’s major conglomerates and financial services companies who have a strong grip on management, just showing the overall total. In political circles, lawmakers are pushing for full executive compensation disclosure. “Af

Dec 8, 2011By Kang Seung-woo

Companies

Desperate fall prey to loan firms

Loans taken out reach 1 trillion won in first half By Kang Seung-woo A 32-year-old office worker, identified by his surname Park, recently borrowed some money from one of the nation’s major private money lenders. Often snubbed by commercial banks due to a low credit rating, Park did not expect to secure a loan, but he was approved by the lender. As is common in his case, private money lenders operating here depend on aggressive marketing strategies to expand their businesses and as a result, the amount of the loans they approved surpassed 1 trillion won in the first half of 2011, data showed Wednesday. According to the latest figures from the Financial Services Commission (FSC), Financial Supervisory Service (FSS) and Ministry of Public Administration and Security, the outstanding loans from private money lenders totaled 8.63 trillion won ($7.64 billion) as of the end of June, up 1.70 trillion won from 7.56 trillion won from the end of last year. The number of clients turning to loan sharks increased from 2.2 million in 2010 to 2.47 million in June this year. Uns

Dec 8, 2011By Kang Seung-woo

Companies

NPS to buy dollars abroad for investments

By Kang Seung-woo Korea’s national pension fund is considering buying U.S. dollars overseas to use in its global investments. In an interview Tuesday, National Pension Fund (NPS) Chairman Jun Kwan-woo said that raising the funds internationally will be more cost effective and also help stabilize the risk-sensitive local currency market. Currently, the pension fund secures greenbacks domestically. ``We have proposed a plan to the government over the possibility of buying U.S dollars from abroad, instead of from the local foreign exchange market, for our overseas investments. Working-level discussions are underway with the Ministry of Strategy and Finance and the Ministry of Health and Welfare, and although nothing has been decided yet, I think the government will agree in principle,’’ said Jun, stressing that the country needs to locate more financing sources from abroad. “The NPS’ assets will reach 500 trillion won within four or five years and eventually 1 quadrillion won in a decade. If the fund’s overseas investment increase to 30 percent of its total investments, it wi

Dec 7, 2011By Kang Seung-woo

Companies

Foreigners up T-bond holdings

By Kang Seung-woo Foreign investors are actively buying Korean government bonds as their holdings hit a record high last month, data showed Wednesday. According to the latest figures from the Financial Supervisory Service (FSS) and Korea Financial Investment Association (KOFIA), the amount of listed government bonds held by foreigners reached 63.63 trillion won ($56.43 billion) as of the end of November, accounting for 16 percent of the total government bond ownership of 394.82 trillion won. The figure marks the highest level since the bond market was opened to overseas investors in 1998. Foreign holdings of government bonds have been on the increase since the global financial crisis. After standing at 9.2 percent in 2007, ownership reached 13.3 percent at the end of last year, according to the data. In addition, foreign investors’ purchase of government bonds takes up a large part of the overall financial foreign ownership, including currency and special and corporate bonds, representing 64.4 percent last year. The figure jumped to 72.8 percent in November this yea

Dec 7, 2011By Kang Seung-woo

Companies

Card firms, insurers in fee fight

By Kang Seung-woo An ongoing dispute between life insurance and credit card companies on card fees is entering another round. Life insurers claim that they shoulder a too heavy burden in “swipe fees,” which they want cut to below 1 percent, while card issuers echo the blame back, saying they are just trying to jump on the bandwagon amid growing pressure to slash these in general. Observers say that consumers may fall victim to the spiraling argument if the firms stop accepting card payments or raise insurance premiums. In fiscal 2010, 22 local life insurance firms raked in about 83 trillion won ($73.37 billion) in premiums and a mere 2.1 percent was paid by credit card. However, the card-paid amount stood at 1.74 trillion won and 50 billion won flowed to card companies as fees. On Monday, Mirae Asset Life Insurance became the latest player to join the blame game by mulling whether to refuse to accept card payments. The insurer, an affiliate of Mirae Asset Financial Group, said it is currently discussing with card firms whether to stop allowing policyholders to p

Dec 6, 2011By Kang Seung-woo

Companies

Large firms’ delinquency ratio hits four-year high

By Kang Seung-woo Major companies’ delinquency rate with Korean banks reached its highest level in five years last month due to increased defaults by shipbuilders and constructors, the financial watchdog said Monday. According to the Financial Supervisory Service (FSS), local banks’ lending to major companies recorded a 1.36 percent delinquency ratio as of the end of October, up 0.86 percentage points from a month earlier. The number marked the highest since the 1.6 percent tallied in November 2006. The ratio is measured based on lending that is overdue for more than one day. “Slumping business conditions in the shipbuilding and construction industries and seasonal factors resulted in the increased default rate in major corporate lending,” said an official at the FSS. The ratio of overdue loans by shipbuilders increased 7.47 percentage points month-on-month to 10.8 percent, while that of constructors recorded 2.9 percent, up from 1.79 percent the previous month, the financial watchdog noted. Overdue loans by major players in real estate, construction and shipbuildi

Dec 5, 2011By Kang Seung-woo

Companies

’More user protection needed’

By Kang Seung-woo The head of the nation’s financial watchdog Monday criticized financial institutions for a lack of consumer protection. “Financial companies have had a superior position over consumers and focused on boosting their business sizes, ignoring any sense of protecting their customers,” Financial Supervisory Service (FSS) Governor Kwon Hyouk-se said at a workshop in Seoul. “Unlike foreign entities, domestic financial institutions have evolved to the current level through local operations dealing with households, small- and medium-sized enterprises and independent businesspeople, but they have turned a blind eye to them when in times of need.” He added that they have stepped up efforts to share growth with consumers amid growing uncertainties in the eurozone. According to Kwon, the fallout from the European sovereign debt crisis is expected to affect the Korean economy, so financial firms are required to help them deal with the crisis because the collapse of consumer confidence could have a negative influence on financial players. His strong remarks came

Dec 5, 2011By Kang Seung-woo

Companies

Smartphone or no phone

Consumers deprived of choice to use ordinary phones By Yoon Ja-young Park Hee-sun, an elderly housewife in Seoul, recently switched to a smartphone but not because she wanted to. As the battery is the life of any mobile phone, the handset that she had been using for three years often died quickly so she decided that it was time to get a new handset. At the mobile shop in Bangbae-dong, southern Seoul, where she lives, she looked for an ordinary feature phone, but only two or three models that had been released a couple of years ago were available. The vendor recommended opting for a smartphone. When she hesitated over the price, he said that smartphones were actually cheaper. Some less popular smartphones were actually free if she subscribed to an unlimited data scheme. Only two years after introduction, smartphones users are quickly expanding in number _ already surpassing 20 million, here. The country has marked the steepest growth of infiltration, but hidden under the surge are consumers who have been forced to switch to smartphones. Subsidy, commission distort han

Dec 2, 2011By Kang Seung-woo

Companies

BOK buys gold again in November

By Kang Seung-woo The nation’s central bank said Friday that it had purchased more gold again in November to raise its reserve of the yellow metal in an effort to diversify its portfolio of its foreign reserve investment and reduce risks caused by market volatilities. In addition, growing pursuit of a safe asset stemming from emerging economies also affected the decision to take more gold. According to the Bank of Korea (BOK), it made a purchase of 15 tons of gold last month to increase the nation’s gold reserves to 54.4 tons worth $2.17 billion as of the end of November. The purchase was the central bank’s second acquisition of gold this year. It bought 25 tons of the yellow metal in June and July for the first time in 13 years. Thanks to the buying, the gold reserves of Asia’s fourth-largest economy jumped by three notches to 43rd in the rankings of the World Gold Council. “The BOK purchased gold last month in a bid to diversify its portfolio of foreign exchange reserves,” Lee Jung, head of the investment strategy team at the BOK’s Reserve Management Group, told r

Dec 2, 2011By Kang Seung-woo

Kang Seung-woo

Read more

Credit card firms under siege over fees

CEO paychecks may be subject to mandatory disclosure

Desperate fall prey to loan firms

NPS to buy dollars abroad for investments

Foreigners up T-bond holdings

Card firms, insurers in fee fight

Large firms’ delinquency ratio hits four-year high

’More user protection needed’

Smartphone or no phone

BOK buys gold again in November

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