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Fate of K bank up in the air

K bank CEO Shim Sung-hoon closes his eyes while participating in a National Assembly audit in Seoul, on Oct. 16, 2017. YonhapBy Lee Min-hyungThe fate of cash-strapped K bank will be determined next week when the National Assembly is set to discuss revising laws on management of internet-only banks here.Lawmakers plan to bring the issue to the negotiating table on Feb. 26 during a judiciary committee. When the revision is passed, the nation's first internet-only bank will be able to normalize its business by raising capital from its major shareholder, KT.K bank has suffered from years-long losses since it started in 2017, by failing to increase capital. K bank failed to expand its capital from KT, as regulators disallowed the telecom operator to become the lender's controlling shareholder because of its violation of the Fair Trade Act.But if a revision is approved, it will allow K bank to receive capital from the telecom company.K bank came to the fore with much fanfare in April 2017 as the nation's first internet-only bank, followed shortly after by KakaoBank. As of the end of that y

Feb 20, 2020By Lee Min-hyung
Fate of K bank up in the air

Korean Re expands foothold in South America

By Kim Bo-eunKorean Re CEO Won Jong-gyuThe Korean Reinsurance Company (Korean Re) is set to grow its business in South America through a new office in Bogota, Columbia, the firm said Thursday.According to Korean Re, it received approval from local authorities Feb. 18 to open the office.Central and South America have great growth potential as the insurance penetration rate is low compared with other continents.Korean Re said it sought to establish a new base in the region to disperse its continent-based portfolios.The company said Columbia is in a strategic location to operate a business in Central and South America.Several global reinsurers including Munich Re, Swiss Re and the France-based SCOR are in Bogota.Korean Re now has 12 overseas outlets ― three subsidiaries, four branches and five offices. Six were opened in the past five years under CEO Won Jong-gyu's leadership.Korean Re opened a subsidiary in London in 2015 and branches in Labuan, Malaysia, in 2017 and Dubai in 2018. Subsidiaries were opened in Zurich last year and in Shanghai in January."A base in Central and South Amer

Feb 20, 2020By Kim Bo-eun
Korean Re expands foothold in South America

Mirae Asset global ETFs accelerate growth

Horizons ETFs CEO Steve Hawkins, third from left, speaks during a Mirae Asset Global ETF Rally held in Seoul, June 7. / Courtesy of Mirae Asset Global InvestmentsBy Kim Bo-eunMirae Asset Global Investments' exchange-traded funds (ETF) business is accelerating growth based on active M&As around the world.The asset management firm is managing ETFs worth over 45 trillion won ($38 billion) in eight countries ― Korea, Canada, Australia, China, the U.S., Colombia, Brazil and India.An ETF is a basket of securities ― stocks, bonds, commodities or a mix of these ― traded on stock exchanges.The scale of Mirae Asset's ETFs has grown by more than 13 trillion won in the first few months of this year.Mirae Asset's ETFs were first launched in 2006 as three "TIGER ETFS" listed on the Korea Exchange. Mirae Asset's ETFs now make up a 24 percent share of the local market.In 2011, Mirae Asset acquired Canada's Horizons ETF Management and Australia's BetaShares.As of December 2019, Horizons ETFs had 91 listed ETFs on the Toronto Stock Exchange, with total assets exceeding 9 trillion won.BetaShares ET

Feb 20, 2020By Kim Bo-eun
Mirae Asset global ETFs accelerate growth

Hyundai Capital to buy Sixt Leasing in Germany

An ad for Sixt / Courtesy of SixtBy Park Jae-hyukHyundai Capital confirmed ongoing negotiation with Sixt to acquire a controlling stake in the German mobility service provider's leasing business subsidiary.The Hyundai Motor Group's auto finance arm said in its press release Thursday that Hyundai Capital Bank Europe ― a joint venture between Hyundai Capital and Santander Consumer Bank ― has taken steps to purchase shares in Sixt Leasing.The press release came as Sixt had confirmed the negotiation in its regulatory filing a day earlier.Market observers said Sixt and Hyundai Capital's confession showed a deal was imminent.“The deal is expected to be finalized by late March at the latest,” an industry source said.Sixt Leasing, one of major vehicle leasing companies in Europe, has offered tailored mobility services to individual and corporate customers based on its online platform, according to Hyundai Capital.Hyundai Capital has yet to announce the specific amount of shares it will acquire.But the proposed sales price is 18 euros ($19) per share in Sixt Leasing plus dividend

Feb 20, 2020By Park Jae-hyuk
Hyundai Capital to buy Sixt Leasing in Germany

KDB in dilemma over sales of insurance unit

KDB Life Insurance's headquarters in central Seoul / Korea Time file By Kim Bo-eunKDB Life, the insurance arm of the Korea Development Bank (KDB), has become a headache for the state-run lender as its attempt to unload the debt-ridden affiliate has hit a snag amid the worsening market environment.The KDB will have to pay a fine if it doesn't sell KDB Life by the end of March as it acquired the life insurer in March 2010 through a private equity fund (PEF) it set up with Consus Asset Management. The PEF and its subsidiary hold over a 90 percent stake in the firm.Under current regulations, a PEF is not allowed to own a financial services firm for more than 10 years.KDB put the unit up for sale in September last year, and had intended on selecting a preferred bidder by the end of 2019 to push forward with the sale early this year.Only a few PEFs applied in preliminary bidding in November, so KDB extended the deadline."The preliminary bid is still ongoing," a KDB offici

Feb 20, 2020By Kim Bo-eun
KDB in dilemma over sales of insurance unit

IBK, DGB most vulnerable to virus outbreak

The Industrial Bank of Korea headquarters in Seoul. / YonhapBy Park Jae-hyukThe Industrial Bank of Korea (IBK), Daegu Bank and Jeju Bank are among the lenders that will be most affected by the drop in domestic consumption and tourist arrivals following the spread of the novel coronavirus, according to Moody's Investors Service, Wednesday.The global credit ratings agency said in a recent report that the outbreak of COVID-19 has the potential to disrupt several key Korean industries, which increases asset quality risk for the more exposed banks.It said the epidemic will affect most adversely the credit quality of banks that have significant exposure to the service sector, such as accommodation, food services, transportation, wholesale and retail.“Based on the rated banks' local currency loans, Jeju Bank, Daegu Bank and IBK have the highest exposure to these sectors,” said Sophia Lee, Moody's Investors Service's senior credit officer, financial institution's group.“Jeju Bank has the highest loan exposure to wholesale, retail, transportation, accommodation and food serv

Feb 19, 2020By Park Jae-hyuk
IBK, DGB most vulnerable to virus outbreak

'Income gap' widens among card issuers

By Park Jae-hyukThe gap in earnings between large and small credit card firms widened in 2019, as the latter was hit harder by the government policy to cut transaction fees to alleviate the burden on small business owners, according to analysts, Monday. Last year, Shinhan, Samsung and KB Kookmin managed to post solid earnings as before.In contrast, Woori and Hana suffered worsening profits, because of the unfavorable policy.Given the smaller card firms have relied heavily on profits from transaction fees, unlike larger ones that have minimized their revenue losses through business diversification, analysts expect the “income gap” to become wider among the domestic card issuers.“Due to tightened government regulations, the nation's card industry will be reorganized, giving large companies more controls over the market,” Shinhan Investment analyst Kim Soo-hyun said.Business bellwether Shinhan Card, for example, has made efforts to earn more from leasing and installment financing to offset declining profitability.As a result, it posted a 508.8 billion won ($430 m

Feb 19, 2020By Park Jae-hyuk
'Income gap' widens among card issuers

Private label credit cards boost Hyundai Card's competitiveness

By Kim Bo-eunHyundai Card's private label credit cards (PLCCs) / Courtesy of Hyundai CardHyundai Card's focus on private label credit cards (PLCCs) has boosted the firm's competitiveness amid tough market conditions.PLCCs are store branded cards intended for use at a specific store, offering loyalty awards or benefits for customers. Hyundai Card has issued a series of them with partners including Costco, eBay and Emart.PLCCs enable card issuers to share costs with the partnering firm. They also share profits. For card firms, this is a way to bring down costs, attract customers of the partner firm and also seek new opportunities in data sharing with the companies.For example, with a retailer, a card firm can access data on customer purchases. Card firms have limited data on transactions that retailers can expand on ― what, where and when customers made purchases ― enabling the companies to identify purchasing patterns.Card firms can then provide customized services, such as discount coupons based on purchase data.Partner firms, on the other hand, are able to raise brand awareness and

Feb 18, 2020By Kim Bo-eun
Private label credit cards boost Hyundai Card's competitiveness
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