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Korean banks still vulnerable to money laundering

By Park Jae-hyukKorean banks lag far behind foreign commercial banks here in their efforts to prevent money laundering, despite the global trend of tightening regulatory standards.Amid growing concerns over their carelessness toward regulatory compliance, the local lenders have blamed the nation's financial authorities for their sluggish investment in workers and anti-money laundering systems.According to data from the Korea Financial Intelligence Unit given to Rep. Hong Sung-kook of the ruling Democratic Party of Korea (DPK), the number of employees involved in anti-money laundering at Shinhan, KB Kookmin, Hana, Woori and NongHyup banks was 67 on average as of September, nearly half the average of employees at Citibank Korea and Standard Chartered (SC) Bank Korea.Citibank and SC Bank have hired 138 and 104 workers here for the task, respectively.The gap is considered quite significant, given that the number of employees at the five Korean banks was 15,403 on average and the two foreign banks had 3,878 workers on average as of June.In addition, Korean banks invested 3.62 billion won

Oct 26, 2020By Park Jae-hyuk
Korean banks still vulnerable to money laundering

Koreans in Indonesia still face W45 bil. insurance loss

Hana Bank's head branch in central Seoul / Korea Times fileBy Kim Bo-eunKoreans in Indonesia who signed up for savings insurance plans offered by local state-run insurer Jiwasraya are still unable to collect 45 billion won in claims as the insurer has defaulted.Jiwasraya sold 1.3 trillion won in savings insurance plans guaranteeing between 6 percent and 9 percent interest rates, at seven banks including Hana Bank's subsidiary in Indonesia.The insurance company, however, stated it was unable to pay customers whose policies matured in 2018 and 2019. Jiwasraya is currently on trial for allegations of fraud in managing investments. Among Jiwasraya policyholders who have yet to redeem their investments, there are 474 Koreans, and their investments amount to 45.3 billion won.Out of the 474, nine policyholders have received payments, but for the remaining 465, the issue has been pending for two years.Regarding the distribution of the policies, Hana Financial Group acknowledged last year that mis-selling had occurred. The savings insurance plans were found to have been promoted as savings pr

Oct 25, 2020By Kim Bo-eun
Koreans in Indonesia still face W45 bil. insurance loss

Woori Financial takes over Aju Capital

By Lee Min-hyungWoori Financial Group will acquire a 74-percent stake in Aju Capital valued at around 570 billion won ($52.77 million), in a move to enhance the group's non-banking business, the company said Friday.The board of the financial holding firm decided to take over the stake from Well to Sea Investment, a local private equity firm, but Woori did not disclose the exact value of the deal.The move is in line with Woori's group-wide efforts to diversify its portfolio and focus more on non-banking areas in order to reduce its heavy reliance on the banking sector. As of the end of June, Woori Bank accounted for 88 percent of Woori Financial's total net profit.The deal will also allow Woori to acquire Aju Savings Bank, a 100-percent subsidiary of Aju Capital. Woori Financial is the only company which has not operated the capital leasing and savings bank businesses among the nation's five major financial holding firms.Aju Capital's total assets reached 7.54 trillion won as of the end of June, falling far behind that of other major capital leasing firms ― such as KB Capital, Shinhan

Oct 23, 2020By Lee Min-hyung
Woori Financial takes over Aju Capital

Internet-only banks argue 'statistical ambiguity' over high default rate

By Lee Min-hyungThe nation's internet-only banks have been criticized for poor management that has led to what appears to be a high default rate, but the banks argue this is nothing more than “statistical ambiguity.”The average default rate of non-collateral (credit) loans offered to customers in their 20s by the two internet-only banks ― Kakao Bank and K bank ― came in at 3.47 percent at the end of August, according to data released by Rep. Jang Hye-young of the Justice Party. This is four times higher than that of local commercial banks.Even if the dataset raises concerns over weak risk management, this is far from the truth as the relatively high figure was calculated less than a month after K bank resumed its business in July following a years-long capital erosion, the mobile lenders argued.As K bank is in the initial phase of restarting its business and normalizing its financial soundness, the default rate remains high, according to the lender. But this does not mean that its ongoing business activities are exposed to potential risks, as the high default rate was cal

Oct 23, 2020By Lee Min-hyung
Internet-only banks argue 'statistical ambiguity' over high default rate

BOK hints at removing engraving of Hirobumi Ito's writing

Shown in the top image is the word “priority” engraved in Chinese on the cornerstone of the Bank of Korea's former headquarters in downtown Seoul, Friday. The bottom image shows the original calligraphy obtained by the country's Cultural Heritage Administration, which confirmed the word was handwritten by Hirobumi Ito, the first resident general of Korea prior to the 1910-45 Japanese occupation of the peninsula. Korea Times fileBy Kim Yoo-chulBank of Korea (BOK) Governor Lee Ju-yeol said Friday the bank is in talks with the Cultural Heritage Administration to possibly remove the engraving of the word “priority” written in Chinese on the cornerstone of the bank's former headquarters in downtown Seoul.“The BOK will be very quick in addressing the issue about Hiromubi Ito's calligraphy and the strokes slanted down from the left to the bottom right which were found in the two characters of 'jeong' and 'cho' engraved on the foundation stone. The bank is exploring three options. After thorough discussions with the CHA, the bank will resolve the issue as quickl

Oct 23, 2020By Kim Yoo-chul
BOK hints at removing engraving of Hirobumi Ito's writing

Korea, China renew currency swap deal worth W70 tril.

An official from Hana Bank's counterfeit analysis center takes a look at Chinese yuan notes at its office in Seoul, May 26. YonhapBy Lee Min-hyungThe Bank of Korea (BOK) said in a statement Thursday that it had renewed its 70 trillion won ($59 billion) currency swap deal with the People's Bank of China for another five years, in a move to promote bilateral trade and ward off any liquidity crisis.The five-year renewal will expire Oct. 10, 2025, after both sides agreed to extend the period and the size of the arrangement from the previous three-year deal for 64 trillion won.BOK Governor Lee Ju-yeol signed the deal with his Chinese counterpart Yi Gang, with both monetary authorities reaching a consensus in expanding the swap scale and period with a view to ensuring regional financial stability, according to the central bank.“The two sides believe that the action will contribute to promoting bilateral trade between the two countries and regional financial stability,” an official from the BOK said. “The two sides also expect that this action will serve as a foundation fo

Oct 22, 2020By Lee Min-hyung

Will Shinhan's decision on quarterly dividends pay off?

By Lee Min-hyungAn air of cautious optimism is emerging over whether Shinhan Financial Group's plan to offer quarterly dividends will help enhance its stock valuation, but a near-term rebound appears unlikely due to the industry's structural slowdown and a series of lingering risk factors surrounding the firm's fund fiascos, market analysts said.The nation's top-tier financial holding firm decided recently to offer the quarterly dividends to investors and this will take effect as early as March 2021 during its planned shareholders' meeting. The step is to defend against the firm's dismal stock performance by enhancing shareholder value through the regular dividends, according to the company. Analysts have generally expressed optimism regarding the move, saying it's a positive factor for the firm's longer-term stock rebound. Shinhan is the first financial holding firm to have announced the decision, even if no concrete vision has been shared. They said the decision, in itself, displays the firm's willingness to pay stable dividends to investors at a time when other big financial congl

Oct 22, 2020By Lee Min-hyung
Will Shinhan's decision on quarterly dividends pay off?

Citibank Korea nurtures women leadership and diversity

Citibank Korea is one of financial institutions that actively seeks to nurture women's leadership and the value of diversity ― goals that its global headquarters also seeks to promote across the countries it operates in. “Citi Women Leadership Perspectives, Dialogue in Korea” that the U.S.-based bank's Korea unit organized in late July was one such program aimed at supporting female empowerment. Citibank Korea's interim CEO Yoo Myung-soon ― an influential female leader herself in the financial sector ― headed one of the panel discussions, sharing the secrets of maintaining a female-friendly, horizontal organizational culture, while discussing lessons learned and achievements made from diversity programs, including those inclusive of women. Citibank's Executive Vice President Valentin Valderrabano also attended the panel discussion. “We have diversity initiatives around pay equity, inclusive leadership, and our Affinity Groups, which specifically focus on hiring, developing and retaining talent,” Valderrabano said. Yoo also said, “The most powerful d

Oct 22, 2020
Citibank Korea nurtures women leadership and diversity

KB Securities' CEO Park Jeong-rim wins IDC DX Award

By Kim Bo-eunKB Securities Co-CEO Park Jeong-rimKB Securities Co-CEO Park Jeong-rim received an award recognizing her efforts in the brokerage's digital innovation, the company said Wednesday.The International Data Corporation Korea (IDC) presented Park the CEO award in this year's Digital Transformation Awards (DX) held Tuesday.The IDC DX selects companies in the Asia-Pacific region that lead in digital innovation. The award is given in 12 countries in the region.The CEO award is newly added to the existing list of awards. KB Securities said Park was awarded for setting up a digital innovation vision for the brokerage, developing a new platform-based business model, expanding partnerships with fintech and bigtech entities and establishing a flexible corporate culture and smart working environment.KB Securities has partnered with video game developer NCSOFT and the investment firm December & Company to set up a joint venture entity offering artificial intelligence-based investment services."Digital transformation is no longer an option but has become essential to deal with the ch

Oct 22, 2020By Kim Bo-eun
KB Securities' CEO Park Jeong-rim wins IDC DX Award
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