Yi Whan-woo

Banks eye military conscripts in search for new customers

Major commercial banks are courting conscripted military personnel as new customers in the middle of a demographic crisis, industry officials said Wednesday. All four banking arms of the country’s financial groups — KB, Shinhan, Hana and Woori — plus the state-run Industrial Bank of Korea (IBK) plan to join a bid in late April that selects debit card issuers for military draftees. The bid is organized by the Military Mutual Aid Association, a military-affiliated agency dedicated to improving the welfare of service members. The association has been assigning a new card issuer every eight or 10 years since 2007 when it adopted it as a new means of financial transactions over cash. Shinhan Bank, KB Kookmin Bank and IBK have served as the issuers so far. Successful new bidders will have the right to run a check card business for eight years beginning in 2026 and secure nearly 20,000 military draftees as customers yearly over the corresponding period. The association plans to pick three bidders this year. “Winning the bid this time will be more crucial than in the past, as the number of

Banks rush to introduce collaborative accounts with popular companies

Four major commercial banks — KB, Shinhan, Hana and Woori — are partnering with leading companies in the commerce sector to encourage more customers to open bank accounts, industry officials said Tuesday. The target audience consists of millennials and Gen Zers, known as brand-conscious consumers with a significant influence on corporate marketing strategies. The banks' strategies focus on offering accounts branded with a partner company's name, providing account holders with various financial benefits when they use the partner company's products and services. In April, KB Kookmin Bank plans to launch the tentatively named "Starbucks Account" in collaboration with Starbucks Korea, the country’s leading coffee franchise. While the country’s largest lender did not specify the benefits to be offered, industry officials speculate that they may include an unusually high deposit interest rate. “The KB Kookmin Bank-Starbucks Korea partnership can appeal to millennials and Gen Zers considering each company is the top brand from their respective industry,” a market observer said. Both S

Nextrade gains popularity among office workers

Park Suk-jun, an office worker at an electronics company, says he is no longer tempted to trade stocks during work hours after Nextrade, the country’s first alternative stock exchange, launched on March 4. Nextrade operates from 8 a.m. to 8 p.m. on weekdays, longer than the trading hours of the Korea Exchange (KRX), the country’s main securities exchange operator, which runs from 9 a.m. to 3:30 p.m. “Thanks to Nextrade, I can sell and buy stocks even after I get off work at 6 p.m. and both the KOSPI and Kosdaq are closed,” Park said, referring to the two stock exchanges run by KRX. Park is among more than 14 million retail investors nationwide who have become the most active users of Nextrade. According to Nextrade, retail investors accounted for 98 percent of the transaction volume, which totaled 136.91 billion won ($93.1 million) in the first two weeks after its opening. “Many of these investors are daytime salaried workers who work in industries other than the securities sector, and therefore can’t freely trade stocks during working hours,” Jung Eui-jung, head of the Kore

Finance minister's unprecedented presidential role comes to end

Minister of Economy and Finance Choi Sang-mok was relieved of the burden of serving as acting president on Monday, nearly three months after he took the job in the wake of the National Assembly's motions to impeach President Yoon Suk Yeol and Prime Minister Han Duck-soo. Earlier in the day, the Constitutional Court dismissed the impeachment motion against Han, reinstating him as prime minister and acting president in the latest twist in months of political turmoil triggered by Yoon’s ill-fated martial law declaration on Dec. 3. The ruling freed Choi, also the deputy prime minister, from his role as the interim leader of the Cabinet. Yoon still awaits the court’s decision over whether to uphold or dismiss the Assembly's motion to impeach him. Choi ran state affairs since Dec. 27 when Han was impeached, going on a rollercoaster ride as he dealt with an extensive range of political, diplomatic, social and economic affairs. “He arduously served four roles, which was possibly unprecedented for any Korean bureaucrat,” a finance ministry official said on condition of anonymity. The offici

Soaring housing, education costs strain middle-income households

High housing and education costs are making it difficult for middle-income households to save money as they struggle to catch up with more wealthy households amid a widening economic gap, government data showed Monday. According to the Korean Statistical Information Service, a website run by Statistics Korea, households that belong to the third group of the five tiers of income brackets had net savings worth 658,000 won ($448) in the fourth quarter of 2024. Net savings refers to the amount of cash available after deducting all living expenses, including taxes, insurance, interest and debts, as well as the cost of food, transportation and education. The term is more narrowly defined than disposable income, which only excludes mandatory deductions, such as taxes and debts. The October to December period net savings for households in the third tier dropped by 88,000 won from a year earlier, marking a steady decrease since the third quarter of 2022. Notable, it was the first time in five years the amount fell below 700,000 won. The third-tier households were the only group among the income br

Jeonbuk Bank signs Korea-Philippines deal on credit information sharing service

Financial stocks not attractive enough for foreigners despite revised Commercial Act

Major financial holding companies rarely attract new foreign investors on the stock market, despite the recent passage of a revision to the Commercial Act, which was anticipated to boost undervalued stocks. For years, these companies were grouped as undervalued stocks despite massive earnings driven by their banking affiliates’ interest incomes. The companies were often criticized for relying on “windfall profits” and faced pressure from financial authorities on sales policies. The regulatory pressure negatively affected investor sentiment. The interest income-reliant business portfolio also negatively affected investor sentiment, as diversifying portfolios was seen as crucial to survive in the rapidly evolving financial industry. Under the circumstance, the revised Commercial Act fueled speculation that financial stocks would gain traction, especially from large investors such as foreigners. Approved by the National Assembly on March 13, the amendment to the legislation expands corporate directors’ duty to shareholders and, therefore, enhances shareholders’ rights for returns. N

National pension subscribers to pay more, receive more under first reform in 18 years

National pension subscribers will pay 13 percent of their monthly incomes, and receive 43 percent of their average monthly earnings after they retire, under a sweeping reform bill approved by the National Assembly, Thursday. The bill aims to achieve a goal of “pay more, receive more,” which came after years of debate concerning the country’s universal pension scheme that policymakers and other stakeholders hesitated to address due to its political sensitivity. Currently, each working individual contributes 9 percent of their monthly income as premium. Such contribution rate will be hiked to 13 percent. Rate hikes will be made for eight years beginning 2026, with an annual increase of half a percentage point. The income replacement rate, which determines the amount of pension a subscriber will take in proportion to their pre-retirement income on monthly average, will be raised from the current 40 percent to 43 percent in 2026. The pension reform is the first in 18 years, and marks the third major overhaul since the pension was formed in 1988. The pension scheme had faced growing call

Cash assistance more effective than tax deduction to boost births: report

The government should increase its cash assistance rather than reduce taxes to effectively support couples to have more children and help fight the country's demographic crisis, a new report said Wednesday.

Why wealthy Koreans shop for real estate in Japan

More wealthy Koreans are on a real estate buying spree in Japan, as these properties are more affordable and lucrative compared to those in Korea, real estate industry officials said Tuesday.