Business - The Korea Times

Kyobo pushes for 'digital innovation'

Kyobo Life Insurance Chairman Shin Chang-jae speaks during a 2021 strategy meeting with executives at its headquarters in Seoul on Jan. 8. Courtesy of Kyobo Life InsuranceBy Lee Min-hyungKyobo Life Insurance Chairman Shin Chang-jae has pledged to inject innovative spirit into the firm's digital business, as one of his top management goals for 2021.“Digital technology is nothing more than a tool for us to innovate existing and new businesses,” Shin said during a strategy meeting Friday.He stressed the notion of “innovation” to stay ahead of the company's rivals in the digital era.“We need to focus on innovation, rather than the digitization,” he said. “The gist of innovation is speed. We should innovate our businesses faster than competitors to become a winner.”For this year, the nation's top-tier life insurance company has pledged to make “fundamental changes” in the firm's overall management systems ― such as traditional work processes, communication methods and business models ― in a way to embrace digital transformation.D

Jan 10, 2021By Lee Min-hyung

Local lenders face polarization in delinquency rates

GettyimagesbankBy Anna J. ParkAs the economic shock from the COVID-19 pandemic is prolonged, signs of polarization are being spotted everywhere in the economy, including local lenders' recent performances.According to the financial industry, while the average delinquency rate at the nation's 79 savings banks stood at around 5 percent as of the end of September, last year, seven of them recorded deteriorated default rates ranging from 10 percent to 25 percent.However, the top five players in the sector logged a better performance during the third and fourth quarters of 2020, with their delinquency rates improving compared to the same period last year.SBI Savings Bank, the top performer in the sector, saw a 1.84 percent default rate during the second half of last year, down 0.94 percentage points year-on-year. Other major players in the sector, including OK, Welcome and Pepper savings banks, also recorded a fall in their delinquency rates during the same period. Major local banks also saw a fall in the average delinquency rates of 0.3 percent as the end of last September, the lowest si

Jan 9, 2021By Anna J. Park

Local lenders face polarization in delinquency rates

Former Shinhan exec to direct KB's digitization

Cho Young-suh, head of KB ResearchBy Park Jae-hyukA former vice president at Shinhan Financial Group's IT service unit has jumped ship to Shinhan's rival KB Financial Group, taking the nation's banking industry by surprise. Cho Young-suh, former vice president of Shinhan DS, announced that KB Financial Group had appointed him as the new head of the group's think tank, KB Research, and the leader of KB Kookmin Bank's digital transformation strategy department in its latest reshuffle last week.Considering the conservative and rigid culture of the domestic banking industry, it is unusual for banking group executives to move to rival lenders. Shinhan and KB are in fierce competition to take the leading bank title. The Korea Times called Cho to ask him the reason for his recent decision, but he was unavailable for comment.Cho is known as an expert in digital strategies for financial services companies.Starting his career as a finance ministry official, he went on to work for McKinsey & Company and Bain & Company as a consultant in charge of financial firms' growth strategies and d

Jan 7, 2021By Park Jae-hyuk

Former Shinhan exec to direct KB's digitization

Iran tensions alarm IBK, Woori Bank

Industrial Bank of Korea (IBK) headquarters in Seoul / Courtesy of IBKBy Park Jae-hyukThe Industrial Bank of Korea (IBK) and Woori Bank are keeping a close eye on the aftermath of Iran's Islamic Revolutionary Guard Corps' seizure of a Korean-flagged oil tanker in the Strait of Hormuz for alleged environmental and chemical contamination, the banks said Tuesday.Their reaction came after speculation was raised that the Middle Eastern country's latest action was mostly intended to regain access to its oil export revenue, which has been seized here over the past two years, following Washington's economic sanctions.Both Woori and IBK said no updates have been made on Iran's frozen accounts since the vessel's seizure.IBK said the government has the right to use the funds in the frozen accounts as the state-run lender's largest shareholder is the Ministry of Economy and Finance.“We are not aware of which ministry is assigned to handling the accounts,” an IBK spokesman said.Woori declined to confirm whether it has had any talks with the Korean or Iranian governments over the

Jan 5, 2021By Park Jae-hyuk

Gov't seeks reason behind Iran's tanker seizure

Banking groups pledge for digital, non-banking growth in 2021

Seen above are headquarters of Korea's four major financial holding firms including KB, Shinhan, Hana and Woori. Courtesy of each firmBy Lee Min-hyungLeaders of the nation's major banking groups will focus on growth of their digital and non-banking businesses in 2021 amid widening financial volatilities across the globe, they said in their respective New Year's addresses, Monday.Under the common goal to achieve “digital sustainability” in finance, they have pledged to speed up their digital transformation, a move to deal with the rapidly-changing financial environment with the rise of virus-induced non-face-to-face transactions here and abroad.The financial chiefs also underlined the need to diversify their business portfolios into non-banking areas through M&As.In a New Year speech, Shinhan Financial Group Chairman Cho Yong-byoung urged staff to have a resilient spirit in order to help the group tackle the financial volatility and turn looming crises into opportunities.“The resilient spirit determines survival and growth of a company at a time when market uncer

Jan 4, 2021By Lee Min-hyung

Banking groups pledge for digital, non-banking growth in 2021

China's crackdown on Jack Ma concerns KakaoPay

By Park Jae-hyukKakaoPay is facing growing concerns over its second-largest shareholder, Alipay, after Beijing's financial authorities have intensified their crackdown on Jack Ma, the founder of Alibaba Group and the largest shareholder of Ant Group which operates China's leading mobile payment service.According to foreign news outlets, Monday, the Chinese regulators are apparently attempting to break up the billionaire's fintech empire to partially nationalize the companies he owns. The authorities cited an anti-trust probe and governance reform as the primary reasons for their latest measures.However, market participants view the months-long crackdown as an organized retaliatory measure against the businessman who criticized the Chinese Communist Party's policies in his October speech. A few days after the speech, Ant's listing on the Hong Kong and Shanghai stock exchanges was postponed indefinitely. In addition, Ma abruptly disappeared from a television show that he produced.Market insiders here fear the difficulties facing Ant could have a negative impact on KakaoPay's business a

Jan 4, 2021By Park Jae-hyuk

China's crackdown on Jack Ma concerns KakaoPay

Jack Ma's absence from public view fuels speculation about billionaire's whereabouts

Banks resuming credit loans in 2021

Seen above is a Shinhan Bank sales office in Seoul on Dec. 23 when watchdogs' regulations requiring banks to suspend issuance of credit loans to households were in full swing. YonhapBy Lee Min-hyungDomestic commercial banks are moving to resume their non-collateral (credit) loan business at the start of the new year despite growing pressure from financial regulators.All leading lenders in Korea have been faced with tough regulations from the Financial Supervisory Service (FSS) since last year as the financial authority raised its bar on them to control the rapid rise of household debts by curbing credit loans.As the end of the year approached, authorities urged lenders to tightly manage the 2020 household loan balance, so major banks had no choice but to follow the order and cut the credit lines of most households.But with the arrival of 2021, Friday, KB Kookmin Bank, one of the biggest lenders here, plans to restart offering its household credit loans as of Jan. 4. For about two weeks since Dec. 22, the lender has been blocking households from receiving credit loans over 20 million

Jan 1, 2021By Lee Min-hyung

Will Shinhan surpass KB in 2021 earnings?

KB Kookmin Bank CEO Hur Yin, left, and Shinhan Bank CEO Jin Ok-dongBy Lee Min-hyungWith the nation's two largest banks extending their neck-and-neck rivalry throughout 2020, eyes are on which one between KB Kookmin Bank and Shinhan Bank will take the leading spot this year amid unceasing virus uncertainties.For now, KB is taking the lead in 2020 earnings against Shinhan. By September last year, KB reported an accumulated net profit of 1.88 trillion won, gaining a slight edge against Shinhan's 1.76 trillion won during the same period.In 2019, KB also defeated Shinhan by reporting an annual net profit of 2.44 trillion won, up by 110 billion won from that of Shinhan.Even if major financial holding firms are seeking to expand their non-banking earnings amid the industry's structural slowdown induced by continuous low interest rates, they still rely on revenues from the traditional banking sectors ― particularly the margin between deposit and loan interest rates.Taking increased revenue from the conventional cash-cow banking business also raises the likelihood for the lenders' holding fir

Jan 1, 2021By Lee Min-hyung

Will Shinhan surpass KB in 2021 earnings?

Banks go increasingly casual

Employees of Woori Bank hold a meeting clad in casual attire after the new dress code went into effect at the lender earlier this year. / Courtesy of Woori Bank By Kim Bo-eunBanks have become increasingly wary as tech companies expand their portfolio of financial services. Tech companies hold immense potential, not only due to the traffic their platforms generate but also due to their flexible working culture which facilitates the development of new ideas.This is why traditional financial firms are increasingly making new attempts to change their corporate culture, which has remained one of the most conservative and rigid among other industries.Hana Bank is the latest lender to join the trend of getting rid of uniforms."In order for innovation to take place, we first need to create a working environment that is conducive to it," Hana Bank CEO Ji Sung-kyoo said in a recent note to employees."Let us make adopting a casual dress code the starting point for employees to

Jan 1, 2021By Kim Bo-eun

Regulator tells KB Securities to give retail investors 70% compensation for Lime losses

The headquarters of Financial Supervisory Service located on Yeouido, Seoul. / Korea Times fileBy Anna J. Park The Financial Supervisory Service's (FSS) dispute settlement committee decided Thursday that KB Securities ― one of the sellers of the problematic Lime fund products that resulted in huge losses for retail investors ― should provide compensation of up to 70 percent of their losses.The order came prior to the calculation of the exact amount of losses incurred from the funds was confirmed. The FSS was aiming to reach a prompt resolution to the situation caused by the mis-selling of the problematic fund's products as soon as possible for the sake of victims who were also losing opportunity costs due to losses suffered from the funds. The financial watchdog told sellers of the funds, including KB Securities, Shinhan Financial Investment and Daishin Securities, that they should compensate investors as soon as possible, even before the exact losses have been confirmed. KB Securities said it would consider the terms. The FSS notified the securities firm that they should be prepared

Dec 31, 2020By Anna J. Park

Banking & Finance