The Korea Times

Provisions weigh down on banks’ bottom line

By Kang Seung-woo Despite rising earnings in the first three quarters, banks are still plagued by an increase in bad-debt provisions due to the sluggish housing market and corporate debt restructuring, the nation’s financial watchdog said Monday. The Financial Supervisory Service (FSS) said in a report that the combined provision for bad debt of 18 lenders was tallied at 11.6 trillion won ($10.32 billion) in the January-to-September period, compared with 9.5 trillion won a year earlier. It represents an increase of 21.9 percent. In the third quarter, the provision slightly dipped by 2.2 trillion won to 3.4 trillion won from the second quarter. The FSS said that costs to cover potential losses from loans extended to property developers and large corporate borrowers were attributed to the increase. “It’s difficult to expect that banks’ profits will increase steeply this year as lenders are aggressively bracing for an increase in legal provisions for bad debts amid a sluggish property market and massive corporate debt restructuring,” an official of the FSS said. Meanw

Nov 1, 2010By Kang Seung-woo

Companies

Shinan ― next state bank in line?

It all depends on who will take charge By Kang Seung-woo Shinhan Financial Group has accomplished marvelous growth in the space of 30 years. Indisputably, the engine that has driven its steep upward climb is the ingenuity and can-do spirit shared by its leaders and employees, taking pride in being independent of state control. Now, Shihan’s proud history of independence is in danger of being swept away due to an internal power struggle that has forced its Chairman Ra Eung-chan to step down, while his long-time comrades in arms ― Shinhan Financial CEO Shin Sang-hoon and Shinhan Bank CEO Lee Baek-soon ― are under investigation alongside him. Financial regulators may feel tempted to bring in who they can for the new Shinhan leadership but, if that is the case, it would serve as a poison pill suppressing the Korean banking industry, already under the government’s thumb or foreign-owned. So, partly out of concern and partly out of anticipation, who will succeed Shinhan’s old guard is being wildly speculated about ― government-influenced appointees, or next-generation Shi

Oct 31, 2010By Kang Seung-woo

Companies

POSCO enters Indonesian market

By Kang Seung-woo JAKARTA – POSCO is making a foray into Indonesia to construct an integrated steel mill in cooperation with an Indonesian partner as part of efforts to develop the promising Southeast Asian market and expand its global presence. The Korean steel giant held a groundbreaking ceremony for the steel plant on Thursday in Cilegon, 100 kilometers west of Jakarta, along with its joint venture partner PT Krakatau Steel. “It is significant to enter Indonesia, which has a high potential in Southeast Asia, earlier than our competitors and it will help us secure a footing in the Southeast Asian market,” POSCO Chairman Chung Joon-yang told reporters in a press conference ahead of the ceremony. Indonesia has iron ore and coal deposits totaling 2.2 billion tons and 93.4 tons, respectively, and the Southeast Asian market has seen annual steel demand escalate by more than 30 million tons. “Given that the steel industry is a cornerstone for developing countries like Indonesia, this steel mill will be a win-win project for both sides.” In efforts to meet the gr

Oct 28, 2010By Kang Seung-woo

Companies

POSCO to lead China’s stainless market

By Kang Seung-woo SHANGHAI ― Zhangjiagang Pohang Stainless Steel (ZPSS) has established itself as a leading player in the high-end stainless steel industry in China. ZPSS, a joint-venture company between POSCO and China’s Shagang Group, is the world’s second-largest producer of the metal with an annual production capacity of 3 million tons ― 2 million from POSCO and 1 million tons from ZPSS ― behind Acerinox whose capacity is 3.4 million tons. Along with production, ZPSS, founded in February 1997, has played a key role in promoting POSCO in the world’s most-populated nation and is treated as a role-model joint-venture company between the two countries. It also makes a case for POSCO’s push for global investment on the back of steady growth and successful localization. The company, headed by President Kim Yong-min, has struggled in the past two years due to blows dealt by the global financial crisis and severe overcapacity from sluggish demand in the Chinese stainless steel market, but it expects to bounce back this year thanks to the economic recovery and its efforts to

Oct 27, 2010By Kang Seung-woo

Companies

Woori chosen as top bank

By Kang Seung-woo Woori Bank has been cited for its service, both at home and abroad. The Banker, a global publication based in Britain specializing in banking and finance, named Woori the Bank of the Year in Korea in 2010, given that it showed a solid financial status, efforts to increase shareholders’ profits, well-planned business strategy and distinguished performance, the local lender announced on Wednesday. The prize is not a rarity for Woori, headed by CEO Lee Chong-hwi, as it was its fourth title that the bank has bagged. It previously won the award in 2004, 2007 and 2008. It praised Woori given that it bounced back from its poor marks in 2008 to become the best commercial bank in Korea within a year. The bank’s 2009 net income reached 950 billion won, up from 230 billion won the previous year, and it also posted 0.41 percent and 7.32 percent in return on assets (ROA) and return on equity (ROE), respectively, both of which were better than its competitors. The two indexes are a barometer of a bank’s profitability. Woori, the nation’s second-largest bank by a

Oct 26, 2010By Kang Seung-woo

Companies

What is Shinhan Financial chiefs exit strategy?

Ra may make announcement on his future at board of directors' meeting on Saturday By Kang Seung-woo Over the past week, Shinhan Financial Group Chairman Ra Eung-chan may have been spending most of his time juggling two options for his future ― waiting for the announcement from the financial regulator regarding punitive measures or just stepping down voluntarily before it. For Ra, the first option could be better but riskier as he may be forced to forfeit the chairmanship if the Financial Supervisory Service (FSS), hands down the heaviest penalty, ending his 40-year banking career in disgrace. It seems that Ra has opted for the first option as he went to Japan over the weekend to meet Korea-Japanese shareholders, a move that is widely seen as an attempt to secure their support in order to maintain his chairmanship. On the contrary, there is growing speculation that the 71-year old will seek to resign as Ra was near defeated after a meeting Sunday with the Korean-Japanese shareholders in Tokyo. Ra returned home Monday, two days earlier than expected. There is specula

Oct 26, 2010By Kang Seung-woo

Companies

Korean firms gear up for G20 Summit

By Kang Seung-woo Local major companies have rolled up their sleeves to capitalize on the upcoming G20 Business Summit. They are seeking to use this global gathering as a chance to enhance the global network and improve their corporate image, as their CEOs will participate in discussions at the global conference with high-profile executives from around the world. In addition, they will make a full-strength effort to take advantage of the global public relations (PR) stage for their products during the summit, seen as the largest international event Korea has ever hosted. The G20 Business Summit, scheduled to start on Nov. 10 for a two-day run in Seoul, one day ahead of the beginning of the two-day G20 Seoul Summit, was designed by the Korean government to ensure a more sustainable economic recovery and future growth by having business leaders participate in the G20 process. The agenda of the large-scale gathering of global CEOs will be divided into four main topics of jolting trade activity and investment; stabilizing financial systems; achieving “green” growth; and encou

Oct 22, 2010By Kang Seung-woo

Companies

POSCO discusses business with Ukraine

By Kang Seung-woo POSCO is in negotiations with Ukraine over investment, the company said Friday. Its Chairman Chung Joon-yang met with Ukrainian President Viktor Yanukovych and Prime Minister Mykola Azarov in Kiev on Thursday and Friday, respectively, and talked about business opportunities there. Chung asked them to lend full-scale support to the world’s No. 3 steelmaker in launching projects of the company and its subsidiaries. The projects include development of infrastructure, including harbor facilities, subways and roads. The 62-year-old also suggested that his company can contribute to the Ukrainian steel industry with its high-quality technologies. POSCO signed a MOU with Metinvest Holdings, Ukraine`s largest steel company, seeking business opportunities in the steel industry and in mining across Eastern Europe and the CIS regions as well as active exchange of technological and management information, in September 2009. Ukraine has the world`s largest iron ore reserve, 6th largest coal reserve, and is the 8th largest steel-producing country.

Oct 22, 2010By Kang Seung-woo

Companies

Credit card loans snowballing

By Kang Seung-woo Credit card firms have seen their loan services gaining popularity among users thanks to less stringent processes. However, the easier-to-use system may produce bad loans both to the detriment of users and the card firms. According to the Financial Supervisory Service (FSS), the amount of lending by credit card companies reached 14.1 trillion won as of the end of August, up 23.7 percent from the end of last year, surpassing cash advance services by banks at 12.5 trillion won, which saw a rise of 3.3 percent during the cited period. Borrowing money from credit card firms is much easier and less laborious than taking out a loan from banks. Borrowers can get money from credit-card issuers over telephone or the Internet, while at banks they need to stop by in person and fill out a variety of documents. In addition, the card issuers’ focus on expanding its business portfolio of card loan services is also attributed to its growth. As the profit from credit card sales has decreased due to the decline in card commission at small- and mid-sized affili

Oct 22, 2010By Kang Seung-woo

Companies

Hyundai to make buses, trucks in China

By Kang Seung-woo Hyundai Motor has signed a joint venture with a Chinese commercial vehicle maker in its effort to build its legacy as the world’s largest auto market. Hyundai, the nation’s No. 1 vehicle producer, said Friday that it reached the deal worth 500 billion won ($441 million) with Sichuan Province-based Ziyang Nanjun Automobile the previous day. The Chinese car maker, established in 1998, is one who produces all kinds of commercial vehicles, and is the 11th largest with a total capital of 130 million yuan, more than 1200 employees and more than 400 different professional technicians. It runs two plants, which are located in Chengdu and Ziyang and has an annual output capacity of 120,000 vehicles. Through the contract, both companies will each invest 250 billion won to produce trucks, buses and their engines and they will also push forward the joint venture in sales, research and development and after-sales services. The companies are expected to sell about 90,000 vehicles in 2011, but the number will increase to 300,000 by 2015 in a plant to be built in

Oct 22, 2010By Kang Seung-woo

Kang Seung-woo

Read more

Provisions weigh down on banks’ bottom line

Shinan ― next state bank in line?

POSCO enters Indonesian market

POSCO to lead China’s stainless market

Woori chosen as top bank

What is Shinhan Financial chiefs exit strategy?

Korean firms gear up for G20 Summit

POSCO discusses business with Ukraine

Credit card loans snowballing

Hyundai to make buses, trucks in China

Top 5 stories