Business - The Korea Times

Will new IBK chief seek transformation into financial group?

By Kim Bo-eun Industrial Bank of Korea (IBK) CEO Yoon Jong-won Yoon tasked with boosting earnings, stock priceIt has been over a decade since the Industrial Bank of Korea (IBK) has sought to launch a holding company to make IBK a financial group. Attention is growing over whether its new chief Yoon Jong-won can take on the challenge, after his inauguration speech last week.At the ceremony in late January, Yoon pledged to "make IBK a top-notch financial group with global competitiveness."IBK has eight affiliates including a brokerage unit, investment firm and savings bank. Yet due to the absence of a holding company, the affiliates have been limited from creating synergy amongst themselves.IBK accounts for 85 percent of all of the earnings generated by the bank and subsidiaries. This compares with the figures of major financial groups, for which the bank accounts for approximately 70 percent on average.Without a holding company, the bank is limited from expanding non-b

Feb 11, 2020By Kim Bo-eun

Will new IBK chief seek transformation into financial group?

Korea urged to unlock opportunities in Asia's hidden cities

Choi Won-sik, McKinsey & Company's Managing Partner for Korea. / Korea Times photo by Choi Won-sukMcKinsey's Seoul chief says country is 'only scratching surface'By Kim Bo-eunAsia's significant growth potential is not exactly breaking news; but a top consulting firm's figures offer a sobering realization of the future magnitude of the region's economy and the opportunities this will ultimately unlock.According to McKinsey & Company, by 2040 Asia will account for 52 percent of global GDP, and 54 percent of the global middle class will be in the region, accounting for 39 percent of global consumption.Growth is ongoing, with 60 percent of foreign direct investment flowing into Asia being regional and 43 percent of the top 5,000 global companies based in the region.Amid these developments, Korea has been setting up and expanding its footprint in the region, especially in Southeast Asia. Yet, McKinsey's Seoul chief says there is so much potential yet to be captured.“I think Korea is only scratching the surface ― it has a comfortable degree of affinity with several Southeast

Feb 11, 2020By Kim Bo-eun

Korea urged to unlock opportunities in Asia's hidden cities

Woori-FSS feud deepening over DLF case

The Financial Supervisory Services' headquarters on Yeouido, Seoul, left, and Woori Financial Group's headquarters in central Seoul / Korea Times fileFinancial group fights back against financial authorities' sanctionsBy Kim Bo-eunWoori Financial Group plans to fight punitive measures imposed on its chairman Son Tae-seung for the mis-selling of derivative-linked funds (DLF) that caused major losses for investors last year.The Financial Supervisory Service (FSS) finalized the sanction for Son last week, which bans him from serving positions in the finance sector for three years. The measure bans Son from serving a second term as the Woori group's chief, which was set to be approved at a shareholders meeting next month.However, Woori's board implied last week the group will take legal action against the measure. It said Son will keep his position until financial authorities officially notify the group of the sanction. The board was stating it has no intention to support Son stepping down and understands that a suit is inevitable if Son wishes to keep his position.Bank officials decline

Feb 11, 2020By Kim Bo-eun

KB Kookmin Card accelerates expansion in Southeast Asia

KB Kookmin Card CEO Lee Dong-cheol, fourth from left, cuts a ribbon with other Korean and Cambodian financial authority officials at the opening ceremony for the card firm's branch in Phnom Penh's district of Sen Sok, Monday. / Courtesy of KB Kookmin CardBy Kim Bo-eunKB Kookmin Card said Monday its Cambodian subsidiary opened a new branch in Sen Sok, Phnom Penh, as part of efforts to boost its presence in the Southeast Asian country.Sen Sok is a vibrant district in the capital, where large-scale commercial and residential development projects are under way.The card firm established its Cambodian subsidiary KB Daehan Specialized Bank in September 2018 after taking over Tomato Specialized Bank in April that year. The subsidiary posted a 200 million won net profit in the third quarter of last year, just 10 months after its launch. KB is focusing on mortgages and auto loans there, and plans to launch a credit card business.“Based on the expansion of our local sales network in Cambodia, we will seek continued growth in our existing mortgages and auto loans business and accelerate ef

Feb 10, 2020By Kim Bo-eun

KB Kookmin Card accelerates expansion in Southeast Asia

Woori's privatization plan hits snag amid leadership crisis

By Kim Bo-eunUncertainties are growing over Woori Financial Group's privatization plan, due to its falling share price amid a leadership crisis.The financial authorities last year stated that the Korea Deposit Insurance Corp. (KDIC) would sell its 17.25 percent stake in the financial holding company over three years beginning in 2020.The state-run agency holds ownership of the banking group, as government funds were poured in to save the lender during the Asian Financial Crisis in 1997. Other shareholders include the National Pension Service (8.37 percent), the employee stock ownership association (6.39 percent) and IMM Private Equity (5.98 percent).Of the 12.8 trillion won in funds pumped into the bank, 11.1 trillion won has been collected back. Based on calculations, Woori's price per share needs to be above 13,000 won, for the government to be able to collect the remaining amount at 1997 prices.Woori's share price stood at 16,000 won Feb. 14, 2019, after the bank's holding company was launched a month earlier, but the price has been on a downward trend over the past year.The price

Feb 10, 2020By Kim Bo-eun

Woori's privatization plan hits snag amid leadership crisis

Shinhan Bank's strategy conference

Shinhan Bank CEO Jin Ok-dong speaks during a management strategy conference at the bank's headquarters in Seoul, Friday. During the meeting with executives, he underlined the need to carry out customer-centric sales strategies. Courtesy of Shinhan Bank

Feb 9, 2020By Lee Min-hyung

Shinhan defeats KB by whisker in 2019

Kookmin retakes leading status in banking businessBy Park Jae-hyukShinhan Financial Group maintained its lead in earnings last year, narrowly beating competitor KB Financial Group, their regulatory filings showed Friday.Analysts expect the two banking groups will continue their fierce competition this year for the “leading financial group” title.In 2019, Shinhan posted a record-high 3.4 trillion won ($2.8 billion) net profit, up 7.8 percent from a year before. This was 91.7 billion won higher than KB's 3.31 trillion won.Although KB retook leading status in the banking sector as KB Kookmin Bank posted a 2.4 trillion won net profit ― while Shinhan Bank earned 2.3 trillion won ― Shinhan remained in top spot because of profits from its non-banking units.Shinhan Card, which posted 508.8 billion won in net income, and Orange Life Insurance, which had a 271.5 billion won net profit, helped Shinhan outperform KB in the non-banking sector.KB Kookmin Card and KB Securities, KB's two biggest non-banking units, posted net incomes of 316.5 billion won and 257.9 billion won, respective

Feb 7, 2020By Park Jae-hyuk

Hana financial urged to boost non-banking biz

Hana Financial Group Chairman Kim Jung-taiBy Lee Kyung-min Hana Financial Group Chairman Kim Jung-tai is being pressured to speed up strengthening the group's non-banking sector after 2019 corporate earnings laid bare the group's “disproportionate” reliance on Hana Bank.The group reported 2.4 trillion won ($2.1 billion) in net profit in 2019, up 7.8 percent from a year earlier, and the largest since 2005 when the group was launched. Yet 89.5 percent of this came from Hana Bank whose net profit stood at 2.1 trillion won, up 3.4 percent from the year before. More drastic and tangible portfolio diversification planning is required to maintain growth momentum sparked by a successful business expansion in Vietnam and enhanced investment banking. Hana Bank's acquisition of a 15 percent stake in the Bank for Investment and Development of Vietnam (BIDV) translated into a 228 billion won profit. The momentum is also bolstered by investment banking which helped the group earn over 2.2 trillion won in fees, up 1.5 percent from 2018. Unless the group finds a way to strengthen its non

Feb 6, 2020By Lee Kyung-min

Hana financial urged to boost non-banking biz

Woori marred by poor internal control systems

Group to keep Son as chief until FSC finalizes sanctionsBy Kim Bo-eunWoori Bank's headquarters in central Seoul / Korea Times fileA series of incidents involving Woori Bank has shown how consumer protection can be compromised under poor internal control systems.The latest revelation is a case in which a bank employee changed the personal identification number (PIN) of over 20,000 customer accounts, in an attempt to make it appear as if customers had begun new transactions with the bank.In competition with rival banks, Woori had increased the number of mobile banking customers by encouraging people to download their mobile bank applications. But many of these people only downloaded the apps and did not use them.Customers that have not made transactions for a certain period of time need to reset their PIN number when they wish to resume transactions. This is why the bank counted new transactions based on changes in PIN numbers.Under sales pressure, the bank employee is known to have changed the PIN number of about 23,000 customer accounts in the first half of 2018.Regarding the case, a

Feb 6, 2020By Kim Bo-eun

Woori marred by poor internal control systems

FSS may face BAI inspection over DLF case

By Kim Bo-eunThe Financial Supervisory Service headquarters on Yeouido, SeoulThe Financial Supervisory Service (FSS) has slapped heavy punishments on chiefs of banks that were responsible for misselling high risk investment options last year, based on inspections of the lenders. Yet the authority faces its own audit soon over a failure to play its role as the supervisory agency in the fiasco over derivative-linked funds (DLF).The Board of Audit and Inspection (BAI) has requested the FSS to submit documents related to punishments imposed for heads of Woori and Hana Bank."We will determine whether we will launch a separate audit of the FSS on the matter, based on our review of the documents," a BAI official said Thursday.According to the official, this would be separate from a regular government agency inspection the BAI is set to begin in March.The BAI is weighing the necessity of a separate audit, based on a request filed by civic groups in November. The civic groups contend that the FSS was responsible for the disaster last year that caused major losses for DLF investors.If the BAI

Feb 6, 2020By Kim Bo-eun

Banking & Finance

Banking & Finance

Will new IBK chief seek transformation into financial group?

Korea urged to unlock opportunities in Asia's hidden cities

Woori-FSS feud deepening over DLF case

KB Kookmin Card accelerates expansion in Southeast Asia

Woori's privatization plan hits snag amid leadership crisis

Shinhan Bank's strategy conference

Shinhan defeats KB by whisker in 2019

Hana financial urged to boost non-banking biz

Woori marred by poor internal control systems

FSS may face BAI inspection over DLF case

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