The Korea Times

Six companies suspected of issuing credit cards illegally

By Kang Seung-woo The nation’s financial watchdog is set to take punitive action against six major credit card issuers for illegal issuances. Once disciplinary measures are decided, the relevant firms will face stricter regulations on fresh credit card issuance and increased card loans. According to the Financial Supervisory Service (FSS) Monday, it has found some 20,000 cases in which credit cards are believed to have been illegally issued after a two-month inspection of the six card companies in May. The six are Shinhan, Hyundai, KB, Samsung, Lotte and Hana SK, all of which have allegedly been involved in excessive growth competition. The FSS says defaults were attributed to the firms’ reckless card issuance to those who were not qualified or their violation of issuance requirements. The regulator plans to get each firm’s inspection team to examine dubious cases and re-check their results before finalizing punishments for the issuers. All six companies are likely to get disciplined, according to the FSS. “It is likely to take two to three months to settle o

Jul 25, 2011By Kang Seung-woo

Companies

Government’s solution works no magic

Household debt growing; credit cooperatives in trouble By Kang Seung-woo The government’s ambitious measures to rein in excessive household debt growth seem to remain far from effective despite financial regulators’ guarantees of a soft landing. Making matters worse, micro-credit cooperatives including the National Credit Union Federation of Korea (NCUFK), better known as Shinhyup, and the Korean Federation of Community Credit Cooperatives (KFCCC) are thrusting themselves into the limelight with possible insolvency. According to sources in the banking industry Thursday, three major lenders — Shinhan, Woori and Hana — recorded an increase of 315.7 billion won ($297.39 million) in household loans between June 30 and July 14 — pushing the debt burden up from 172.56 trillion won to 172.88 trillion won. Shinhan expanded its loans by 248.7 billion won, Woori by 42 billion won and Hana, 25 billion won. In terms of home-backed loans, which make up a large portion of household debt, two players showed increases, as Woori lent 106.1 billion won and KB 45 billi

Jul 21, 2011By Kang Seung-woo

Companies

Savings banks allowed in auto financing

By Kang Seung-woo Savings banks will be allowed to tap into the auto financing industry, the financial regulator said Wednesday. Also secondary lenders located outside Seoul and Gyeonggi Province will be licensed to do business in the capital area. The Financial Services Commission (FSC) came up with measures to help the troubled secondary-banking industry secure stable profits and fiscal soundness rather than focusing on high-risk project financing (PF) loans. According to the FSC, a savings bank, which meets several requirements for fiscal health, will be allowed to do business in the auto financing sector. It will need a Bank of International Settlements (BIS) ratio of over 10 percent, a non-performing loan ratio of less than 8 percent and a Grade II or above in management evaluation. “We expect savings banks to play a positive role in the industry, especially in dealing with used cars,” Koh Seung-beom, director-general of the FSC’s financial services bureau said in a briefing. “In addition, we do not worry that savings banks’ arrival will damage the current

Jul 20, 2011By Kang Seung-woo

Companies

Top four financial groups required to beef up provisions

By Kang Seung-woo The Financial Supervisory Service (FSS) has alerted major financial services companies to pile up higher internal reserves against risks, the watchdog said Wednesday. Its emphasis came as financial institutions from advanced economies gear up for tightened restrictions, while local players are just focusing on paying out hefty sums of dividends to their shareholders. According to the FSS, it has met with management-level officials at major banking groups and advised to make up for their vulnerabilities in the management index. The financial watchdog, especially, put a core tier 1 capital ratio in the spotlight. The ratio, emerging as the new standard of the financial supervision under Basel III rules, is a measurement of core capital, which can be used immediately in times of trouble. According to the FSS, four financial holding firms ― KB, Woori, Shinhan and Hana ― posted sub-par numbers in the ratio. As of the end of the first quarter this year, Hana sat at 10.11 percent, followed by KB at 9.96 percent, Shinhan at 8.66 percent and Woori at 8.50 p

Jul 20, 2011By Kang Seung-woo

Companies

Desperate times, desperate maneuvers

Families using home-backed loans to plug variety of financial holes By Kang Seung-woo Nearly half of housing loans are used for other purposes than purchasing home, the central bank and financial watchdog said Monday. There are stirring concerns that the trend may dig the nation’s already-serious household debt into a deeper hole, observers say. According to the Bank of Korea (BOK) and Financial Supervisory Service (FSS), the outstanding balance of house-backed loans from banks came to 289.9 trillion won ($273.96) as of the end of the first quarter this year, up 1.9 percent from three months ago. The figure marked the 15th straight quarterly increase. In addition, 42 percent of the newly-extended home equity loans in the cited period were spent for other uses, including living expenses, compared with 36 percent at the end of December last year. After getting a housing loan, if a borrower uses it to buy a home or for home registration within three months, it is counted legitimate. It is not mandatory for a borrower to use a home-backed loan in home acquisition.

Jul 19, 2011By Kang Seung-woo

Companies

What does Expedia have to offer Korea?

By Kang Seung-woo U.S.-based online travel giant Expedia is set to enter the Korean market in efforts to gain a better footing in Asia. According to industry sources on Wednesday, Expedia, which has already launched a Korean website, will officially begin business here on July 20. There are mixed reactions in the sector on the world’s leading online travel company’s arrival in the fast-growing local market. Expedia has localized sites for travelers in 20 countries including Japan and Singapore and offers more than 5,000 travel products and services with a network of 130,000 hotels across the world. Via its website, travelers can book airline tickets, hotel reservations and car rentals. Currently, its Korean website just provides hotel reservation services, but if it is loaded with other features including flights in the near future, Expedia, which has cemented its status as a pioneer of dynamic packages, is expected to mount a daunting challenge to local players. Dynamic packages are a new fad among travelers, as they can be customized to meet consumers’ needs in

Jul 15, 2011By Kang Seung-woo

Companies

Regulator insists household debt at manageable level

By Kang Seung-woo Top economic officials are taking turns in silencing questions over the government’s measures to tackle household debt. Financial Services Commission Chairman Kim Seok-dong said Friday that Seoul’s action against mounting consumer debt will lead to a soft landing. Kim’s comment came after Strategy and Finance Minister Bahk Jae-wan spoke on the increasing household debt. “I firmly believe that household debt will make a soft landing,” Kim said in a conference organized by the Korea Chamber of Commerce and Industry (KCCI). “I am determined to carry out the plan (despite a backlash from the banking sector).” Earlier this week, Bahk also said, “Since 2000, household debt has shown a steady growth, but it is manageable, compared with other advanced economies. “On average, the debt problem is at a manageable level and can land softly. The government will make efforts to prevent it from becoming a systemic risk.” The government stepped in to help curb soaring household debt late last month, unveiling plans to assist people in repaying their loans an

Jul 15, 2011By Kang Seung-woo

Companies

’Who’s blinking first’ game at SC First

Bank locked in 19-day ‘resort strike,’ customers withdraw 1 trillion won By Kang Seung-woo SC First Bank’s labor strike was extended to 19 days Friday, making it the longest running collective action in the banking sector’s history. With no compromise in sight, customers have rushed to make withdrawals to the tune of about 1 trillion won ($946 million) during the period. This accounts for just 2 percent of total deposits amounting to 46 trillion won. The figure, however, indicates only the tip of a great deal of loss of confidence among customers that had already been serious even before the strike began. Observers say that the record strike will weaken the bank’s sales capacity. “SC First has faced a declining market share and net earnings and the prolonged strike will further erode its competitiveness,” said a Seoul-based analyst. The bigger issue is the two sides appear to be waiting for the other to succumb first. “We do not have a problem at all in dealing with withdrawals,” said Park Chong-hoon, senior vice president at SC First Bank. “SC First is w

Jul 15, 2011By Kang Seung-woo

Companies

Mobile wallets now in wider use

By Kang Seung-woo The local mobile phone credit card market has shown steady growth in recent months on the strength of the increasing number of smartphone subscribers. This mobile service requires the user services identity module (USIM) chip, embedded in a cell phone, to include credit card information, and enables users to pay for goods and services without carrying a wallet. According to an industry source Thursday, Hana SK Card ― the leader in the segment ― saw subscribers to the service go over 100,000 last month. In January, overall subscription stood at 60,000, and it reached 80,000 in April. In terms of monthly charges using the card, Hana SK Card marked more than 500 million won ($474,000) in May and surpassed 900 million won last month, with daily charges breaking 100 million. Shinhan Card, the runaway leader in the credit card sector, also performed impressively after recently topping 100,000 users for mobile services. The phone credit card sector attributes its rapid advancement to increased smartphone use. The near field communications (NFC) ch

Jul 14, 2011By Kang Seung-woo

Companies

Apple compensates for location tracking

By Kang Seung-woo Apple’s South Korean unit has compensated a local smartphone user for damage he suffered from the company’s illicit collection of location data, a lawyer said Wednesday. According to Kim Hyeong-seok, the user filed a 1 million won ($943) compensation suit against Apple Korea on April 26 following reports that the U.S. tech giant had traced phone and tablet users and stored their location data. The Changwon District Court ruled that Apple should pay the money to Kim and the firm didn’t appeal, which means that it admitted to the charges, the lawyer said. He added that Apple Korea remitted 998,000 won to his bank account last month after deducting 2,000 won in remittance charges. “Apple’s collection of location information in an unauthorized manner breached the Constitution and is a violation of the privacy of users,” Kim said. The court ruling and the firm’s payment could trigger a wave of similar lawsuits here. The number of iPhone users has surpassed 3 million. In April, Apple and Google were criticized for storing geo-positioning information o

Jul 13, 2011By Kang Seung-woo

Kang Seung-woo

Read more

Six companies suspected of issuing credit cards illegally

Government’s solution works no magic

Savings banks allowed in auto financing

Top four financial groups required to beef up provisions

Desperate times, desperate maneuvers

What does Expedia have to offer Korea?

Regulator insists household debt at manageable level

’Who’s blinking first’ game at SC First

Mobile wallets now in wider use

Apple compensates for location tracking

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