Business - The Korea Times

KT revamping financial businesses

From left are KT CEO Ku Hyeon-mo, BC Card CEO nominee Choi Won-seok and K bank CEO nominee Suh Ho-sung / Courtesy of each companyBy Park Jae-hyukKT is drawing attention for its accelerated efforts to revamp its financial businesses to take the lead in the data-driven financial industry, which is considered to be a high-priority following the rise of the data economy.Last week, BC Card announced FnPricing CEO Choi Won-seok will replace incumbent CEO Lee Dong-myun, who was appointed head of the credit card issuer just a year ago.The announcement is interpreted as “surprise” by many industry insiders because BC Card has a track record of letting KT executives lead the company, since KT is the largest shareholder of the card firm with a 69.54 percent stake. Although Choi has served as a non-executive director of BC Card over the past six years, he has never worked for the telecom giant.BC Card said the CEO nominee is expected to create synergy with its internet-only banking subsidiary K bank and to push ahead with financial strategies tailored for KT, based on his expertise i

Feb 8, 2021By Park Jae-hyuk

Woori Financial sets up ESG body to promote sustainable growth

Woori Financial Group headquarters in Seoul / Courtesy of Woori Financial GroupBy Lee Min-hyungWoori Financial Group Chairman Son Tae-seungWoori Financial Group will establish an environmental, social and corporate governance (ESG) body under its board of directors as early as next month to show its willingness for sustainable growth.The move represents the financial group's determination to carry out more efficient and swift decision making on ESG projects, Woori said Sunday.The establishment of the committee will be completed upon receiving approvals from the board in March.“We are going to fulfill our financial social responsibility by performing inclusive ESG policies for the country,” an official from the group said. “We will take a leap forward as one of the nation's leading ESG groups by making group-wide efforts in cooperation with the board of directors.”Woori Financial Group Chairman Son Tae-seung will discuss detailed strategies to enhance the group's ESG strategies with leaders of its key affiliates after launching the committee.Late last year, the

Feb 7, 2021By Lee Min-hyung

Woori Financial sets up ESG body to promote sustainable growth

KB steps up to top position in 2020, pushing Shinhan to second place

The headquarters of KB Financial Group in Seoul. / Courtesy of KB Financial GroupKB, Shinhan and Hana log record-high annual net profits in 2020By Anna J. ParkKB Financial Group retook the number one position in terms of net profit among major financial groups last year, after amassing a record-high annual net profit of 3.45 trillion won ($3.06 billion), up 4.3 percent from 2019. This is welcome news for the group, which last led the market in 2017. KB's long-time rival Shinhan took the leading position in 2018 and 2019.“Based on solid growth in loans, interest profits increased consistently throughout the year. The non-banking sectors' brokerage fees were also sharply up as well. A balanced improvement in performance and growth of the non-banking sector through acquisitions led to the record-high net profit,” an official from KB Financial Group explained.Shinhan Financial Group also logged a record-high annual net profit last year despite the impact from the COVID-19 pandemic. The group released a public announcement Friday afternoon that last 2020's net profit stood at

Feb 5, 2021By Anna J. Park

KB steps up to top position in 2020, pushing Shinhan to second place

Eximbank sells global bonds worth $1.5 billion at record-low coupon rates

Export-Import Bank of Korea (Korea Eximbank) headquarters located in central Seoul / Courtesy of Korea EximbankBy Anna J. ParkThe Export-Import Bank of Korea (Korea Eximbank) announced Thursday that it has raised $1.5 billion by issuing triple-tranche global bonds to overseas investors. The state-run lender said the triple-tranche bonds' coupon rates were the lowest ever issued by the government, reflecting overseas investors' confidence in Korean debt as a safe asset. The bonds are composed of three different coupon rates and maturities ― three-year maturity bonds of $500 million, five-year maturity of $700 million and 10-year maturity of $300 million. The three-year notes provide 23 basis points, or 0.23 percent, above the three-year U.S. Treasury; the five-year bond offers 28 basis points above the five-year U.S. treasury, and the 10-year bond gives 38 basis points above the 10-year U.S. treasury note. The bank said that by offering bonds with various maturity and coupon rates, it could secure high demand from overseas investors. About 51 percent of the bonds were purchased by cen

Feb 4, 2021By Anna J. Park

Eximbank sells global bonds worth $1.5 billion at record-low coupon rates

Myanmar coup pressures Korean banks

Kim Chang-woo, far left, head of KB Kookmin Bank Myanmar, stands along with high-level local officials at the official opening ceremony of the bank's branch in Yangon on Jan. 27. / Courtesy of KB Kookmin BankBy Anna J. Park It has been less than a week since KB Kookmin Bank's Yangon branch in Myanmar ― the first one in the Southeast Asian country ― was launched, Jan. 27, but the Korean lender faces an emergency situation following the military coup there earlier this month.An official at the bank said the regime change was unexpected, but operations at the Yangon branch have returned to normal.“On Monday ― the day of the coup ― all financial transactions were frozen. But on Tuesday, the bank's financial operation went back to usual, as the freezing of accounts and transactions was lifted,” a bank official told The Korea Times. “We have completed checking on the safety of our staff in Myanmar.”Regarding concerns that the sudden regime change escalates risks for KB's Southeast Asia business plans, the bank's official said that no one can be sure right now about

Feb 4, 2021By Anna J. Park

UN calls for democracy in Myanmar following military coup

BofA getting closer to LG Energy Solution

This image highlights the growth of the battery industry. Yonhap By Kim Yoo-chulLG is getting closer to Bank of America-Merrill Lynch (BofA), after the U.S.-based investment bank was chosen as one of the top underwriters of the planned initial public offering (IPO) of LG Energy Solution (LG Energy). What seems interesting for LG Energy's pick is that, despite BofA's track record for handling various sizable deals ― such as Hyundai Rotem's IPO back in 2013 ― BofA hasn't handled any local IPOs since 2014, according to local financial sources, Tuesday.“Among the seven big-name underwriters chosen by LG Energy for its planned IPO, BofA is the only investment bank that has no experience handling local IPOs between 2014 and 2020. Besides Hyundai Rotem's 2013 IPO, BofA only participated as a co-underwriter in Samsung Securities' IPO back 2010. For more than a decade, BofA has only participated in two deals,” one source said. KB Securities and Morgan Stanley have been named

Feb 2, 2021By Kim Yoo-chul

BofA getting closer to LG Energy Solution

Kakao Bank to widen mid-interest loans ahead of IPO

Kakao Bank CEO Yoon Ho-young speaks during an online press conference at its headquarters in Seongnam, Gyeonggi Province, Tuesday. Courtesy of Kakao BankBy Lee Min-hyungKakao Bank, the nation's leading internet-only lender, will widen its loan business portfolio focusing on mid-interest-rate products for those with medium- to low-credit scores, the bank said Tuesday.This is a strategic move to expand the lender's business areas and improve profitability ahead of an initial public offering (IPO) slated for the latter half of 2021.“We are going to drastically increase the supply of mid-interest-rate loan products this year, even if their specific volume is still not confirmed, due to lingering uncertainties in the local financial market,” Kakao Bank CEO Yoon Ho-young told reporters during an online press conference.The lender supplied 1.4 trillion won worth of mid-interest-rate-loan products in 2020. Mid-range interest loans generally carry interest rates of around 6 percent to 10 percent, which is higher than typical non-collateralized (credit) loan products offered by fir

Feb 2, 2021By Lee Min-hyung

Kakao Bank to widen mid-interest loans ahead of IPO

CEOs of Shinhan, Woori, Hana in hot seat over sales of defective financial products

From left are Woori Financial Group Chairman Son Tae-seung, Hana Bank CEO Ji Sung-kyoo and Shinhan Bank CEO Jin Ok-dong. YonhapBy Lee Min-hyungLeaders of the nation's major financial groups are in the hot seat with regulators planning to sanction them for poor management in their selling of defective financial products last year.The Financial Supervisory Service (FSS) recently notified former Industrial Bank of Korea (IBK) CEO Kim Do-jin of heavy sanctions for his failure to properly supervise the sale of troubled funds linked to Lime Asset Management and Discovery Asset Management.The FSS will hold a sanctions committee meeting Thursday to make a final decision on whether to take severe disciplinary action against Kim.Financial executives who are reprimanded or receive a warning from regulators are not allowed to work at other financial firms for between three and five years.The heads of Korea's banking industry are watching closely as the FSS plans to hold similar committee meetings soon to decide on the level of punishment for most commercial banks here ― including Shinhan, Woori

Feb 2, 2021By Lee Min-hyung

CEOs of Shinhan, Woori, Hana in hot seat over sales of defective financial products

Foreign banks in dilemma over dividend regulation

People walk by branches of Citibank Korea, left, and Standard Chartered Bank Korea in Seoul in these file photos. / YonhapNongHyup resists financial regulator's guidelineBy Park Jae-hyukAttention is focusing on whether Citibank Korea and Standard Chartered Bank Korea will reduce dividends paid to their foreign headquarters this year to follow a recommendation by the Financial Services Commission (FSC) to keep their dividends below 20 percent of earnings.Last Wednesday, the financial regulator advised financial holding companies and banks to follow the guideline so they can boost their ability to absorb potential losses from the prolonged coronavirus crisis.This guideline is also applied to the two foreign banks, which have long been accused of draining out the national wealth with their hefty dividend payouts sent overseas. Their dividend payout ratios have remained much higher than those of their Korean peers, which have paid 25 percent to 28 percent of their earnings in dividends.In 2019, Standard Chartered Bank Korea sent its largest shareholder 655 billion won ($585 million), mor

Jan 31, 2021By Park Jae-hyuk

Foreign banks in dilemma over dividend regulation

Korean banks speed up corporate culture reforms to survive

Streamlining reporting mechanisms, abolishing ranks become new normalBy Lee Min-hyungKorea's financial firms are ramping up efforts to reform their rigid, hierarchical corporate cultures and break away from long-standing conservatism by streamlining their reporting mechanisms as well as abolishing bureaucratic ranks and outside hiring.This is seen as a desperate move to embrace rapidly changing business conditions as digital banking trends have been accelerated by the COVID-19 pandemic.Major banks here identify changing their working environments as a prerequisite, in order to root out their notorious top-down corporate culture and embrace the digital paradigm shift that's taking place in the banking industry.The trend is noteworthy in that the financial industry has for decades been considered among the least sensitive to change, as their revenue-making structures were stable and simple. As a result, bank clerks have generally been less motivated to take risks and embrace challenges.But this no longer applies now that non-face-to-face transactions have become commonplace and lenders

Jan 31, 2021By Lee Min-hyung

Banking & Finance