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Korean Re on alert against Mideast tension

An oil tanker is on fire in the Sea of Oman near the Strait of Hormuz in this June 2019 file photo. / AP-YonhapBy Park Jae-hyukThe Korean Reinsurance Company (Korean Re) and marine insurers are keeping a close eye on the ongoing tensions between the United States and Iran as the companies may face worsening profitability if there are any incidents involving vessels sailing through the Strait of Hormuz, according to industry officials, Sunday.Although the nation's leading reinsurer and marine insurers have yet to raise their premiums, industry officials expect they will consider rate hikes as foreign insurers have done.“We are monitoring how the political feud unfolds, but we have yet to make a decision as to whether to raise our insurance rates or not,” an insurance company official said.The Strait of Hormuz is one of the main routes for the Middle Eastern oil producers to export their crude oil.It is used when Korea imports crude from Saudi Arabia, the United Arab Emirates and Kuwait.Industry officials estimate 21 million barrels of crude and condensate collectively wort

Jan 12, 2020By Park Jae-hyuk
Korean Re on alert against Mideast tension

Woori, Shinhan, KEB set to sue Lime to avoid responsibility

From left are Woori Bank CEO Son Tae-seung, Shinhan Bank CEO Jin Ok-dong and KEB Hana Bank CEO Ji Sung-kyoo. / Korea Times fileBy Park Jae-hyukWoori, Shinhan and KEB Hana banks and 13 other sellers of Lime Asset Management's troubled option-based funds are preparing to take legal action against the nation's largest hedge fund, according to industry officials, Sunday.Their move is seen as an attempt to avoid taking responsibility for apparent investor losses.The remaining 13 sellers are the Industrial Bank of Korea (IBK), Busan Bank, Kyongnam Bank, Shinhan Investment, KB Securities, Daishin Securities, Mirae Asset Daewoo, NH Investment & Securities, Shinyoung Securities, Korea Investment & Securities, Yuanta Securities, Hanwha Investment & Securities and Samsung Securities.The banks and the brokerages said they will take every possible measure, including filing a criminal suit, if inspections by the Financial Supervisory Service (FSS) and Samil PricewaterhouseCoopers (PWC) find allegations against Lime to be true.In October 2019, they organized a taskforce when Lime announ

Jan 12, 2020By Park Jae-hyuk
Woori, Shinhan, KEB set to sue Lime to avoid responsibility

Korean firms urged to enhance risk management abroad

Refinitiv Korea Representative Director Kim Suk-joon / Courtesy of Refinitiv KoreaRefinitiv's Korea chief warns of risks associated with overseas biz partnersBy Kim Bo-eunFor financial companies in Korea, global expansion has become a crucial task amid the country's slowing growth and low interest rates. Firms including banks and brokerages are increasingly scaling up their presence overseas, especially in the fast-growing Southeast Asian region.Financial data and risk solution provider Refinitiv says it can play a role in these efforts. The company is the former financial and risk unit of Thomson Reuters, taken over by private equity firm Blackstone Group in 2018. It is set to be acquired by the London Stock Exchange this year."If global expansion is the way Korean financial firms should go, how to prepare for associated risks would be one of the factors that should be seriously considered. We can provide help to this end,” Refinitiv Korea's Representative Director Kim Suk-joon said in an interview held at the company's office in central Seoul, Thursday.Refinitiv confidently s

Jan 12, 2020By Kim Bo-eun
Korean firms urged to enhance risk management abroad

Major asset managers growing through investment diversification

By Anna J. ParkSome of the leading asset managers in Korea marked substantial growth in their assets under management (AUM) in 2019, due to diversification strategies.According to data from the Korea Financial Investment Association, out of the top 10 asset managers here, NH-Amundi Asset Management recorded the highest year-on-year growth last year, with its AUM growing 26 percent or 8.83 trillion won ($7.57 billion) to 43.27 trillion won as of Dec. 31.KB Asset Management ranked second with a 16 percent growth in AUM, followed by Korea Investment Management (15 percent), Kiwoom (11 percent) and Kyobo AXA (11percent).CEO Bae Young-hoon of NH-Amundi Asset Management, the seventh-largest asset manager in Korea, told The Korea Times that such a record was possible due to an increase in their diversified asset classes.“In 2019, we saw balanced growth in all our asset classes: stocks, bonds, alternative assets, money market funds (MMF), etc. In order to log sustainable growth this year, we plan to add more alternative investments such as infrastructure and exchange-traded funds (ETF)

Jan 9, 2020By Anna J. Park
Major asset managers growing through investment diversification

Shinhan, KKR raise $200 mil. tailor-made fund

Shinhan Financial Group Chairman Cho Yong-byoung, right, shakes hands with KKR Co-President Joseph Bae at the Shinhan Financial Group headquarters in Seoul, after signing a memorandum of understanding regarding a strategic partnership for global alternative investment on Sept. 21, 2018 file photo. / Courtesy of Shinhan Financial GroupBy Park Jae-hyukShinhan Financial Group and KKR jointly raised a $200 million tailor-made fund, as part of efforts to enhance Shinhan's capability in global alternative investments, the nation's leading banking group said Thursday.The Korean financial group and the U.S. private equity firm have pursued cooperation in various fields since September 2018 when they signed a memorandum of understanding regarding strategic partnership for global alternative investment.Shinhan said the recently raised fund is especially tailored for Shinhan as the banking group is allowed to intervene in KKR's decision-making procedure when the foreign firm uses the fund for investments in its various portfolios worldwide.In general, asset management companies can operate thei

Jan 9, 2020By Park Jae-hyuk
Shinhan, KKR raise $200 mil. tailor-made fund

KEB Hana signs up to consult KIKO compensation

The KEB Hana Bank headquarters in Seoul / Yonhap By Park Jae-hyukKEB Hana Bank became the first lender to participate in a consultative group for the settlement of disputes over losses incurred from knock-in-knock-out (KIKO) contracts, which caused over 3 trillion won ($2.5 billion) in losses to local exporters at the time of the 2008 global financial crisis.The commercial bank said Wednesday its board of directors decided to join the consultative group.The KIKO options were designed to enable buyers to hedge against currency volatility, allowing them to sell foreign currency at a fixed rate when the exchange rate moved within a pre-set range. However, major losses were incurred for firms that signed the KIKO contracts after the outbreak of the financial crisis in 2008, and the Korean won plunged 25 percent against the U.S. dollar.In December 2019, the Financial Supervisory Service (FSS) advised six banks to pay a total of 25.5 billion won to four firms, in the rang

Jan 8, 2020By Park Jae-hyuk
KEB Hana signs up to consult KIKO compensation

Will IBK CEO offer board seat to labor union?

The Industrial Bank of Korea (IBK) union members block newly appointed IBK CEO Yoon Jong-won, left, from entering his office at the IBK headquarters in Seoul, Tuesday. / YonhapBy Park Jae-hyukThe Industrial Bank of Korea (IBK) is facing growing concerns as the state-run lender's newly appointed CEO Yoon Jong-won is probably going to offer to introduce a “co-determination system” in a bid to appease the bank's union, according to industry officials, Tuesday.In a co-determination system, seats on a board of directors are given to employees or their representatives.This was one of pledges President Moon Jae-in made during his election campaign, but it has never been carried out in the nation's financial industry.Previously, the state-run Export-Import Bank of Korea (Eximbank) discussed with its union about offering one board seat to an expert recommended by its members. However, it eventually hired two experts recommended by management as new board members.The Eximbank union's failed attempt will likely prompt the IBK union to further pressure their new CEO to enforce worker

Jan 8, 2020By Park Jae-hyuk
Will IBK CEO offer board seat to labor union?

English job titles become new norm for Hyundai Card

Hyundai Card CEO Chung Tae-youngBy Park Jae-hyukHyundai Card and Hyundai Capital have officially begun using job titles in English, instead of those in Korean, as part of their efforts to become more globalized financial services firms.Chung Tae-young, the vice chairman and CEO of both companies, wrote on his Facebook, Friday, their ranking system has been revised into a three-level system with “associate, manager and senior manager,” starting this year, from a five-level one with “sawon, daeri, gwajang, chajang and bujang.”The new job titles will be commonly be abbreviated as “asso, manager and senior,” according to the CEO.Chung stated in November 2019 that his companies would streamline their five-level ranking system to three, so as to break their hierarchical structures to allow their employees a sense of freedom to become more creative.He said the use of English job titles is intended to allow for better collaborations among Hyundai Card and Hyundai Capital subsidiaries worldwide.“Some people may think the English job titles are unneces

Jan 8, 2020By Park Jae-hyuk
English job titles become new norm for Hyundai Card
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