The Korea Times

Banks face trouble in managing dollars

By Kang Seung-woo Korean banks have been flush with dollars thank to the U.S.’ quantitative easing policy. But too many dollars is putting them in trouble, as they have difficulty calling the plentiful reserves into play due to tightened restrictions by the government. According to sources in the financial industry on Thursday, local lenders have decided not to issue foreign currency bonds through overseas public offerings until the end of 2010. Kookmin Bank, the nation’s largest bank by assets, does not have any plan to issue foreign bonds until the end of this year. Kookmin last issues Samurai Bonds - a yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations ― in July. Woori Bank has already secured rich foreign currency funds via foreign bond issuance in the first half of this year and Hana Bank is also in a dollar-rich condition after issuing bonds worth $900 million overseas. The Korea Development Bank (KDB) will be in a cease-fire mode for the time being after issuing planned baht bonds worth $150 million in the four

Nov 11, 2010By Kang Seung-woo

Companies

Economy losing growth momentum

By Kang Seung-woo The nation’s economy has shown signs of losing growth momentum, with a key leading indicator falling for the 10th straight month. The Organization for Economic Cooperation and Development (OECD) said Wednesday that the OECD composite leading indicator (CLI) for Asia’s fourth-largest economy in September stood at 101.9, down from the previous month’s tally of 102.4. The CLI is a composite economic indicator that gauges how the economy will fare six months ahead by measuring the current industrial output, housing and financial market conditions, and the gross domestic product (GDP) of each nation. A figure above 100 means the economy will continue to expand, while a reading below 100 means economic downturn. The average for the 33 OECD members has remained unchanged at 102.8, marking the fourth consecutive month at that level and it means that economically-advanced countries will continue to expand without falling back into recession, the Paris-based think tank said. “The CLIs show signs of continuing expansion in Germany, Japan, the United States and R

Nov 10, 2010By Kang Seung-woo

Others

POSCO’s soft-spoken leader

By Kang Seung-woo The steel industry often invokes images of CEOs with a barrel chest and broad shoulders. Having looks opposite this stereotype is unassuming, soft-spoken Chung Joon-yang, chairman of POSCO, the world’s No. 3 steelmaker. Chung’s looks may prove to be deceiving, since the 62-year-old hesitates to make tough decisions and follow them through. His management philosophy is largely about expansion. Under his leadership, Posco is the only company among the top 10 steel makers that has not reported a quarterly loss since the global financial crisis hit in 2008. Since Chung was at the helm last year, he has been active in making a foray into the global market with hopes of its investment boosting the company’s profile abroad and putting it in a better position against rival steel producers in the world. The company is also pushing to build more plants in foreign countries as well. The steelmaker is pursuing a $7 billion plant in India’s Karnataka state along with a $12 billion project in Orissa and a $6 billion Indonesian plant. As of now, it currently ha

Nov 9, 2010By Kang Seung-woo

Companies

Hanwha, Shinhan reel amid scandals

By Kang Seung-woo When it comes to the insurance business, earning customers’ trust is crucial for success. In that regard, an insurance firm always places top priority on maintaining a good corporate image through a variety campaign ads and social contribution activities. Some leading local life insurers, including Korea and Shinhan, are suffering, as their parent groups are entangled in a series of business scandals and their corporate images have been tarnished as a result. According to insurance industry sources Monday, Hanwha Group is seeking to rename Korea Life, Hanwha Life, backed by the strong commitment of group Chairman Kim Seung-youn. However, this plan has hit a snag, due to a probe into Kim for his creation of slush funds and a planned audit of the sale of Korea Life Insurance to Hanwha Consortium, putting the change of name in doubt. Prosecutors raided the headquarters of Hanwha and its affiliate, Hanwha Securities, in September and said they discovered scores of borrowed-name bank accounts that Kim might have used to keep illegal funds possibly amountin

Nov 8, 2010By Kang Seung-woo

Companies

GDP growth for 2011 to be stunted to 4%

By Kang Seung-woo Korea’s economic growth is expected to fall to as low as 4 percent next year, due to the waning effect of stimulus measures and the base effect of this year’s better-than-expected performance, a government source said Monday. According to the Ministry of Strategy and Finance and Bank of Korea (BOK), the gross domestic product (GDP) growth of this year is expected to surpass 6 percent, higher than the previous estimate of 5.8 percent, so the economic outlook for 2011 will be reduced to the mid 4 percent level in its announcement next month. The government previously estimated that the economic growth will hover around 5 percent. “If Korea can pull off growth of just zero percent in the fourth quarter, the new GDP target could be met,” a government official said. “However, the stronger growth this year will make it hard for next year’s growth rate to reach the 5 percent level as previously forecast, because a gain in gross domestic product is calculated year-on-year.” BOK Governor Kim Choong-soo has also come up with the same forecast for next year’

Nov 8, 2010By Kang Seung-woo

Companies

Tong Yang mulls selling life insurance business

By Kang Seung-woo Tong Yang Group is considering selling its stake in Tong Yang Life Insurance to improve the financial structure of its cement unit, a company official said Friday. Affiliates of the group own a 50 percent stake in the life insurer. The group, which has been put under a creditor-led restructuring program since April 2009, has made efforts to transform itself into a financial holding group based on Tong Yang Major Corp., but has struggled due to weakening demand in the construction and cement industries. Tong Yang Major is a company principally engaged in making and selling cement and ready-mixed concrete, and using those materials to build luxury apartments, offices, industrial plants, and dams. The group said that the sale of the stake is focused on reducing debts and normalizing Tong Yang Major. “The group is seeking ways to cut debts of Tong Yang Major by selling part of a 50 percent stake in Tong Yang Life Insurance owned by the group’s other affiliates,” a high-level group official said, but he said that details have yet to be determined. He

Nov 5, 2010By Kang Seung-woo

Companies

Ex-Shinhan boss punished for illegal bank accounts

By Kang Seung-woo The Financial Supervisory Service (FSS) took heavy punitive measure against former Shinhan Financial Group Chairman Ra Eung-chan Thursday for violating the Real-Name Financial Transaction Law, which will ban him from taking executives posts at any financial firms for the next four years. In addition, 26 other group officials and employees linked with Ra’s irregular financial transactions were also punished. The FSS handed down an institutional disciplinary warning to Shinhan Bank, the group’s flagship unit. However, Shinhan President and CEO Shin Sang-hoon, who has been suspended from duty for his alleged involvement in illegal lending and embezzlement, was not punished as the FSS found he was not involved in Ra’s irregular actions. “The FSS made the decision, holding Ra accountable for the violation of the Real-Name Financial Transaction Law,” FSS spokesman Kim Gwang-sig said in a briefing. The penalty will be made final by the Financial Services Commission (FSC), the decision-making body of the FSS, on Nov. 17. Ra has been under investigation by

Nov 4, 2010By Kang Seung-woo

Companies

LGLS opens medical sites for doctors

LG Life Sciences (LGLS) has recently launched a doctor-oriented continuous medical education site. According to the company, the site, named “Hello Doctor,” will provide a variety of programs, including local medical news and articles, medical information, up-to-date theses and multimedia data. In addition, unlike other medical sites, it offers the function of a live seminar, which enables doctors to join in online symposiums or video conferences. “Via the Hello Doctor site, we will provide quality medical information and differentiated services with updates on a regular basis to lead the site to be arguably the best continuous medial education site. LGLS was spun off from LG Chem Investment in August 2002. The company, headed by CEO Kim In-chul, has been involved in pharmaceuticals and dates back to 1981, when it began genetic engineering research. Since then, LGLS has focused on the development of synthetic and bioengineered drugs.

Nov 4, 2010By Kang Seung-woo

Companies

Foreign reserves approaching $300 billion

By Kang Seung-woo Korea’s foreign exchange reserves reached a new record high in October on the strength of an increase in the conversion value of other currencies against the U.S. dollar, the central bank said Tuesday. The Bank of Korea (BOK) said that the nation’s foreign reserves amounted to $293.35 billion as of the end of October, compared with the previous record of $289.78 billion in September. It was the fourth time this year that the reserves hit a fresh record high following April, July and September. The figures from July and April were $285.96 billion and $278.87 billion, respectively. The BOK said the increase was due to growth in the U.S. dollar conversion value of assets in other currencies such as the euro and pound, which strengthened against the greenback over the past month. “The reserves climbed mainly because investment profits rose and a stronger yen, euro and pound raised their dollar conversion value,” Moon Han-geun, an economist at the BOK, said. The U.S. dollar lost ground against major currencies on the prospect of additional monetary easi

Nov 2, 2010By Kang Seung-woo

Companies

KDB, Woori post highest bad loan ratio

By Kang Seung-woo The Korea Development Bank (KDB), Woori Bank and the National Agricultural Cooperative Federation (Nonghyup) have been hit hard by the sluggish housing market, with their bad loan ratios reaching a six-year high due to delinquency in their project financing (PF) loans. According to a report by the Financial Supervisory Service (FSS), Tuesday, the bad loan ratio of the state-run KDB was the highest among local banks at 4.17 percent as of the end of September, well above the industry average of 2.32 percent. Woori came in second with 3.85 percent, followed by Nonghyup (2.96 percent), Kwangju Bank (2.79 percent) and Kookmin (2.3 percent) among major local lenders. The bad loan ratio refers to the portion of loans overdue for more than three months. The industry average eclipsed the previous record of 1.94 percent in June by 0.38 percentage points and the combined figure is the highest since the first quarter of 2004, when it tallied 2.5 percent. Non-performing loans totaled 30.3 trillion won, up 4.7 trillion from three months earlier, and sour PF loa

Nov 2, 2010By Kang Seung-woo

Kang Seung-woo

Read more

Banks face trouble in managing dollars

Economy losing growth momentum

POSCO’s soft-spoken leader

Hanwha, Shinhan reel amid scandals

GDP growth for 2011 to be stunted to 4%

Tong Yang mulls selling life insurance business

Ex-Shinhan boss punished for illegal bank accounts

LGLS opens medical sites for doctors

Foreign reserves approaching $300 billion

KDB, Woori post highest bad loan ratio

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