Business - The Korea Times

Citibank Korea to escalate feud with union in exit strategy

Citibank Korea employees walk around in its head office in Seoul, Monday. YonhapBy Lee Min-hyungThe union and top management of Citibank Korea are set to escalate their feud amid the lender's decision to shut down its consumer banking business here, with the former threatening to stage an “all-out” strike against any possibly ensuing personnel restructuring.This came in response to Citi's recent decision to pull its consumer finance businesses ― such as loan, deposit and credit card services ― out of the Korean market. It remains undecided how the Korean subsidiary of the global banking group will put together a detailed exit strategy.Citibank Korea will discuss the situation during an upcoming board of directors meeting slated for April 27.But the lender's management is faced with strong union backlash even before initiating discussions on restructuring measures.“If Citibank Korea pushes for the sale of or withdrawal from the retail banking business here, this will end up causing mass unemployment,” a representative of the union said. “We are going to f

Apr 19, 2021By Lee Min-hyung

Citibank Korea to escalate feud with union in exit strategy

Banks to extend loans worth $3.1 billion to vulnerable people this year

A man passes an ad poster of NH Financial Group's loan service. YonhapSouth Korean banks plan to extend loans worth 3.5 trillion won ($3.1 billion) this year to low-income people with lower creditworthiness to help them cope with the fallout of the pandemic, the financial watchdog said Monday.The 2021 plan represents a rise of 100 billion won compared with 3.4 trillion won initially planned for last year, according to the Financial Supervisory Service (FSS).Last year, local banks extended a larger-than-expected 3.7 trillion won in such loans to 210,000 borrowers.Local banks are running a loan program that extends lending worth up to 30 million won per individual to low-income people with creditworthiness in the bottom 20 percent.Commercial banks plan to provide 2.4 trillion won in such loans this year, followed by state lenders with 740 billion won and regional banks with 320 billion won, according to the FSS. (Yonhap)

Apr 19, 2021

Banks to extend loans worth $3.1 billion to vulnerable people this year

Kakao's much-anticipated IPO to benefit KB

From left are KB Financial Group Chairman Yoon Jong-kyoo and Kakao Bank CEO Yoon Ho-young. Courtesy of each firmBy Lee Min-hyungKB Financial Group and its major affiliates will benefit from Kakao Bank's much-anticipated initial public offering (IPO), as the nation's largest banking group may be able to achieve gains of up to 1 trillion won ($895.2 million) by selling its stake in the internet-only bank after it goes public.KB Kookmin Bank holds a 9.3-percent stake in the internet bank, and is the third-largest shareholder of the Kakao subsidiary. No other commercial banks here have made equity investments in Kakao Bank.Other major conventional banking groups ― such as Shinhan, Hana and Woori ― do not welcome the rapid growth of Kakao Bank, which continues to steal retail customers, particularly in their 20s and 30s, away from the existing players.But this is not the case for KB, as the bank joined hands with the Kakao subsidiary even before its establishment in 2017. Some of KB Kookmin Bank's executives took part in the founding of Kakao Bank by sharing their decades-long knowhow wit

Apr 18, 2021By Lee Min-hyung

Kakao's much-anticipated IPO to benefit KB

Eximbank, ADB trust fund to guarantee Hanwha green bonds

The Export-Import Bank of Korea (Eximbank)'s logo / Korea Times fileBy Yi Whan-wooThe Export-Import Bank of Korea (Eximbank) and the Credit Guarantee and Investment Facility (CGIF) will guarantee green bonds to be issued by renewable energy company Hanwha Solutions, the bank announced Friday. Hanwha Group affiliate Hanwha Solutions will issue its first overseas green bonds worth 1 billion yuan ($153.1 million), starting Monday, as part of efforts to bolster its solar power and hydrogen businesses.Green bonds refer to debt securities issued to invest in environmentally friendly projects. The Eximbank, a state-run policy lender, and the CGIF, a trust fund of the Asian Development Bank (ADB), will each guarantee 50 percent of the yuan-dominated bonds issued by Hanwha, with a three-year maturity and an interest rate of 3 percent.When converted into the Korean currency, the bonds will offer an annual interest rate of approximately 0.7 percent. The bonds received an AA rating from Standard & Poor's.The Eximbank and the CGIF offered credit guarantees for 70 million Singapore dollars ($5

Apr 16, 2021By Yi Whan-woo

Eximbank, ADB trust fund to guarantee Hanwha green bonds

OK, DGB, KB in spotlight as Citi declares exit from Korean retail banking

Citibank Korea headquarters in Seoul / Courtesy of Citibank KoreaFinancial authorities vigilant at US financial giant's announcementBy Park Jae-hyukCitigroup officially announced its exit from consumer banking operations here, casting attention on OK, DGB and KB financial groups that have been mentioned as potential buyers of Citibank Korea's retail banking outlets.OK runs the nation's second-largest mutual savings bank, while DGB is a Daegu-based financial group that owns Daegu Bank.The U.S. financial giant made the announcement after releasing first-quarter earnings figures, saying it was refocusing its global consumer bank presence in Asia, Europe, the Middle East and Africa on four global wealth centers, and exiting from consumer banking operations in Korea and 12 other markets.The announcement had been anticipated ever since foreign news outlets reported in February that Citigroup was considering divesting certain retail banking units in the Asia-Pacific region, including those in Korea.Citibank Korea has yet to disclose a specific timeline for the restructuring, but a source fa

Apr 16, 2021By Park Jae-hyuk

OK, DGB, KB in spotlight as Citi declares exit from Korean retail banking

Citibank to exit retail banking in 13 markets including Korea

Pedestrians walk past the facade of a Citibank building in New York July 14, 2014. REUTERS-YonhapCitigroup said Thursday it will exit consumer banking operations in 13 markets including South Korea as part of its global business reorganization.The U.S. banking giant opened its first branch in South Korea in 1967 and launched Citibank Korea Inc. in 2004 after acquiring KorAm Bank.The group announced it will withdraw from consumer franchising in Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam as the company shifts focus to wealth management."We will operate our consumer banking franchise in Asia and EMEA (Europe, Middle East, and Africa) solely from four wealth centers ― Singapore, Hong Kong, UAE and London," CEO Jane Fraser said in a press release."While the other 13 markets have excellent businesses, we don't have the scale we need to compete. We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional bus

Apr 16, 2021

Citibank to exit retail banking in 13 markets including Korea

Hana Card to focus on data business with new CEO

By Lee Min-hyungHana Card's new CEO Kwon Gil-jooHana Card's new CEO Kwon Gil-joo pledged Thursday to tackle market uncertainties by reinforcing its data business and launching more customer-oriented services.Kwon took office as the leader of the card company after his appointment was approved at a shareholders' meeting.Kwon underscored the need for officials to boost the firm's presence in the data and payment settlement businesses during his one-year tenure.“We should focus more on mapping out data and payment settlement service strategies, and expanding customer bases, even if the industry will continue to face challenges throughout this year,” he said.The first thing he did after becoming CEO was to visit the company's customer service center in Seoul to encourage employees there.“I will not spare any efforts in providing support for them to do their work without any difficulties,” he said. Kwon then made his way to the company's headquarters to spend time with a group of employees there.“As the new CEO, I will remain open-minded in listening to the v

Apr 15, 2021By Lee Min-hyung

Hana Card to focus on data business with new CEO

Mirae Asset sues Shinhan over fund fiasco

Shinhan Investment headquarters in Seoul / YonhapBy Park Jae-hyukMirae Asset Securities said Wednesday that it filed a lawsuit against Shinhan Investment last week demanding compensation for the 9.1 billion won ($8.1 million) it had to return to investors of Lime Asset Management's fraudulent trade finance fund.Last August, Mirae Asset Securities accepted the Financial Supervisory Service's (FSS) recommendation to return the entire amount of money that Lime fund investors had paid, along with three other sellers of the troubled fund ― Shinhan Investment, Hana and Woori banks.Since then, Mirae Asset Securities, Hana and Woori banks have prepared for lawsuits against Shinhan Investment because the company was alleged to have conspired with Lime to conceal problems with the fund, according to an investigation by the FSS. But their lawsuits against Lime have been meaningless because the asset management firm was liquidated last year.Woori recruited clients to invest 65 billion won in Lime's trade fund, while Hana recruited customers to invest 36.4 billion won. They are also expected to s

Apr 14, 2021By Park Jae-hyuk

Mirae Asset sues Shinhan over fund fiasco

Banking groups divided over internet banking services

Financial Services Commission Chairman Eun Sung-soo, left, speaks during a conference with leaders of associations in the nation's financial circle, at the headquarters of the Korea Federation of Banks in Seoul, on March 26. YonhapBy Lee Min-hyungKorea's major financial groups are divided internally over the possible launch of their own internet-only banking services amid fears that this may weaken their corporate identities just for the sake of jumping on the global bandwagon.It has been only recently that discussions started picking up steam in financial circles after the Korea Federation of Banks (KFB) conducted a survey to figure out whether banking groups here were willing to start internet-only bank businesses if they get a license to do so.KFB Chairman Kim Gwang-soo remains optimistic over the move, saying that financial holding firms can operate such services without a huge financial burden after winning approval from authorities.But industry officials said the much-hyped vision would “not necessarily” generate the outcomes desired by existing banking groups, as t

Apr 14, 2021By Lee Min-hyung

Banking groups divided over internet banking services

K bank cuts interest rates amid crypto-backed capital inflow

K bank headquarters in Seoul / YonhapBy Lee Min-hyungK bank, one of the major digital-only lenders here, is moving to cut deposit interest rates amid a surging deposit balance, as cryptocurrency investors place a massive amount of capital in the lender's accounts.Data showed K bank's total account balance surged by around 5 trillion won ($4.44 billion) to 8.72 trillion won as of the end of March, compared to the end of 2020.This was driven by its partnership with Upbit, a Seoul-based digital currency exchange. There has been a sharp increase in the number of investors opening accounts at the lender to trade Dogecoin, a meme-based cryptocurrency traded only at Upbit here.But the unexpected crypto boom here pushed the lender to cut interest rates for most of its saving account products. Early this month, the lender started reducing the interest rate for its regular savings accounts by 0.1 percentage point.This is part of K bank's efforts to maximize profitability by increasing the loan-deposit margin at a time when its loan balance increases at a slower pace than the deposit balance.K

Apr 13, 2021By Lee Min-hyung

Banking & Finance