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Lee Kyung-min

Korea Times AI content 2 team Reporter

Value context and insight. lkm@koreatimes.co.kr

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Economy

Brokerages firms suffer 'earnings shock'

GettyimagesbankBy Lee Kyung-min Korean brokerage firms suffered an earnings shock in the fourth quarter of 2018 due to deteriorating profit margins amid market volatility. KB Securities posted a net loss of 32.4 billion won ($28.98 million) for the last three months of 2018, a major setback from the previous year's 103.3 billion won net profit. The fourth-quarter loss reduced its full-year net income to 178.9 billion won from 271.7 billion won in 2017.Korea Investment and Securities witnessed its net income for the fourth quarter fall 28.9 percent to 87.4 billion won. As a result, its net profit for the entire year came to 498 billion won, down 5.2 percent from 2017.The poor performance is attributable mostly to deteriorating profits involving derivatives products including equity-linked securities (ELS) subject to increased market fluctuations compounded by a higher-than-usual volatility.NH Investment and Securities also recorded only 11.7 billion won in net income in the fourth quarter, not even meeting a third of the 46.3 billion won market average, a figure projected by market a

Feb 11, 2019By Lee Kyung-min
Brokerages firms suffer 'earnings shock'
Economy

Banks' net interest margin widest in 5 years

 By Lee Kyung-min Thedifference between lending rate and deposit rate for Korean banks stood at 2.31 percentage points in 2018, the widest in five years, with expectation growing that their interest income will also be the highest. Bank of Korea (BOK) data showed the banks' average lending rate was 3.71 percent in 2018, while the average deposit rate was 1.4 percent.The margin, the widest since 2013 when it stood at 2.53 percentage points, came after the BOK raised the key interest rate by 25 basis points to 1.75 percent in November 2018. The margin or spread refers to the difference between the rate it receives from loans and what it pays for deposits.The widening spread came as the lenders have jacked up lending rates steeper than their deposit rates.The banks' average lending rate rose by 0.36 percentage points in 2018 from 2016, while their deposit rate rose 0.24 percentage points.Thanks to the widening net interest margin, banks' interest incomes in 2018 are expected to be the record-highest. According to data from the Financial Supervisory Service (FSS), interest income of

Feb 11, 2019By Lee Kyung-min
Banks' net interest margin widest in 5 years
Economy

W6.5 tril. deposits at savings banks not protected

The headquarters of the Korea Deposit Insurance Corp. in Seoul / Korea Times fileBy Lee Kyung-min Customers' deposits worth around 6.5 trillion won ($5.7 billion) at savings banks may not be immediately available to the account holders in the event of the institutions' bankruptcy, according to the Korea Deposit Insurance Corp. (KDIC), Thursday.The state-run organization said 77,551 people each had over 50 million won in 79 savings banks nationwide as of the end of the third quarter of 2018, with the amount totaling over 10 trillion won.Currently, up to 50 million won per bank is protected under the depositor protection act.Of the 10 trillion won, the unprotected amount came to about 6.4 trillion won, a 7.9 percent increase from the previous quarter and a 28.8 percent increase from September 2017. The amount peaked at 7.6 trillion won in 2009 but plummeted to 1.7 trillion won as of the third quarter of 2013. The sharp fall came after 30 major savings banks were shut down due to financially unsound management. The KDIC then spent 27.2 trillion won to resolve the situation. The unprotec

Feb 8, 2019By Lee Kyung-min
W6.5 tril. deposits at savings banks not protected
Economy

Seoul stocks likely to continue mild rallies

By Lee Kyung-min The Seoul stock market is expected to continue on an upward trend for a while on the back of China's stimulus, eased concerns over global trade disputes and the dovish stance of the U.S. Federal Reserve, according to market analysts.They forecast that the market will fluctuate depending on the development of global events but may enjoy mild rallies in the long term.The upbeat outlook came after the benchmark KOSPI enjoyed unexpected rallies in January on a foreign buying spree driven by investors' renewed appetite toward Asian markets.In January alone, foreign investors net-bought over 4 trillion won ($3.7 billion) worth of local shares, the highest monthly amount in 45 months.This is in stark contrast to retail investors offloading around 3.23 trillion won and institutions selling 843.1 billion won more than they bought.The benchmark KOSPI suffered a mild setback Friday but has gained nearly 9 percent since the end of 2018.Alicia Garcia-Herrero, Asia Pacific chief economist at Natixis Global

Feb 8, 2019By Lee Kyung-min
Seoul stocks likely to continue mild rallies
Economy

Brokerages seeking overseas expansion

By Lee Kyung-min Korean securities firms are speeding up efforts to expand overseas business amid deteriorating profit margins here.The move comes as their globalization efforts have started to bear fruit with many of their overseas operations making sizable profits, contributing to the growth of their balance sheets.According to data from the Korea Financial Investment Association, the country's major brokerages enjoyed profits in their overseas business in the first nine months of 2018.Mirae Asset Daewoo's overseas operations recorded 75 billion won ($70 million) in net income between January and September. Nearly half of the profit came from its corporate body set up in Hong Kong, a key overseas operation headed by Mirae Asset Daewoo Hong Kong Chairman Park Hyeon-joo, former chairman and founder of Mirae Asset Group.Since 2008, the Hong Kong body has offered SICAV, an open-ended collective investment plan, in Luxembourg. This was the first time a Korean asset management provided a sophisticated financial investment method common in Western Europe, especially Luxembourg, Switzerlan

Feb 8, 2019By Lee Kyung-min
Others

Best private bank

Yoo Young-jun, left, general manager at KB Kookmin Bank's New York branch, shakes hands with Joseph D. Giarraputo, publisher and president of Global Finance, an English-language financial magazine, during the Best Private Bank Awards ceremony at the Harvard Club in New York, Feb. 5. The bank was recognized as Korea's best private lender for the third year in a row. Courtesy of KB Kookmin Bank

Feb 7, 2019By Lee Kyung-min
Best private bank
Economy

Seoul's apartment trading volume hits 6-year low

By Lee Kyung-min Seoul apartment trading transactions fell to a six-year low in January, largely due to the heavier tax on owners of multiple home and tougher lending rules. The measures, key economic policy initiatives spearheaded by the Moon Jae-in administration, seek to crack down on real estate speculation, long cited as the main cause of housing price hikes. According to land and property prices data from the Seoul Metropolitan Government, there were 1,857 apartment transactions in Seoul in January. The figure was down 81.8 percent from 10,198 transactions in January 2017. It was the lowest since January 2013 when it stood at 1,196.The volume peaked at 13,813 in March 2018, shortly before the government imposed a heavier tax on capital gains, and has since continued its downward trend.The volumes last year were 12,235 in September and 10,117 in October, but plummeted to 3,544 in November and 2,299 in December.Volumes in highly speculative districts, including Yongsan-gu and Gangnam-gu, all showed signs of a slowdown. Only 20 transactions were made in Yongsan, a sharp drop from

Feb 6, 2019By Lee Kyung-min
Economy

Korea may become major victim of China slowdown

Sohn Sung-won. Korea Times fileBy Lee Kyung-min China's much-feared economic slowdown is bound to have a particularly grave impact on Korea whose small, open and export-reliant economy is far more vulnerable to external shocks, according to a noted U.S.-based economist. The assessment came after China recorded a 6.6 percent growth rate in 2018, the slowest in 28 years since 1990. He stressed that Korea should brace for a “hard hit” given that China's sketchy economic statistics make it hard for Korea to come up with a data-backed response strategies. “China will continue to have a major impact on the Korean economy,” said Sohn Sung-won, an economics professor at California State University-Channel Islands.“Korea, which depends heavily on exports, will feel worse impact, as the global economy and trading volume slow.”His remarks are indicative of heavy headwinds Asia's fourth largest economy will face given it sells a lot of intermediate goods that are finished for export by Chinese manufacturers. According to 2017 data from the Korea International

Feb 4, 2019By Lee Kyung-min
Korea may become major victim of China slowdown
Economy

Banks pursue better work-life balance

By Lee Kyung-min Korea's major banks are enjoying a better “work-life balance” following the implementation of the shorter workweek mandate which reduced the working hours to 52 per week from 68. Woori Bank workers are able to enjoy every Wednesday to their fullest as the firm designated the third day of the week as “Family Day,” whereby managerial figures are to refrain from giving orders between 4 p.m. and 6 p.m., a few hours before workers go home. No after-work get-togethers, which often continue late into night, are planned that day.Its “PC Off” system allows workers to go home without the pressure to sit by the desk doing nothing long after they finish their daily tasks. “The computers are automatically turned off at 7 p.m., and workers are under less pressure to do a night shift, simply because they can't. There is nothing much to do when computers are turned off. The system has helped workers leave work as planned and get used to not feeling guilty about it,” a Woori Bank official said.Workers can cho

Feb 1, 2019By Lee Kyung-min
Banks pursue better work-life balance
Economy

Boosting soldiers' morale

NongHyup Financial Group Chairman Kim Gwang-soo, second from right, listens to a senior military officer talk about the current situation at a military base in Paju, Gyeonggi Province, Jan. 30. Kim visited the base to boost soldiers' morale ahead of the Lunar New Year holiday, which falls on Feb. 5. Courtesy of NongHyup Financial Group

Jan 31, 2019By Lee Kyung-min
Boosting soldiers' morale
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