The Korea Herald

Borrowers to undergo stricter income checks

Jul 22, 2015

Individual borrowers will have to undergo stricter assessments when they apply for bank loans under new guidelines to curb the nation’s household debt.Banks will be instructed to take borrowers’ redemption capability into greater consideration than their collateral from next year, said financial regulators, the Finance Ministry and the Bank of Korea said in a joint statement Wednesday.Their policy reportedly reflected the estimate that the record-high level of outstanding household loans ― worth
Finance minister urges quick passage of extra budget

Jul 22, 2015

South Korea's finance minister called on lawmakers Wednesday to pass an extra budget quickly to help cushion the fallout of Middle East Respiratory Syndrome and economic uncertainties. The government submitted the 11.2 trillion-won ($10.3 billion) supplementary budget plan to the parliament for approval on July 6, with policymakers initially expressing hope it would be passed by July 20. Rival parties have failed to see eye to eye on the budget's size, raising worries that it may not be passed
Korea mulls curbs on capital outflow

Jul 21, 2015

Finance Minister Choi Kyung-hwan indicated Tuesday that the government may take action to stabilize financial markets if there is a sudden capital outflow.Minister Choi also tried to ease concerns among foreign shareholders about the nation’s negative views on short-term speculative investments. Choi Kyung-hwan, deputy prime minister and minister of strategy and finance. Yonhap“If the U.S. Fed rate hike gives a severe boost to capital outflow (from Korea), we may revise the system and bring in m
[Graphic News] Korea suffers age disparity in unemployment

Jul 21, 2015

South Korea has relatively low unemployment, but its young workers have the biggest comparative disadvantage to their middle-aged peers of any country in the Organization for Economic Cooperation and Development, a report showed Monday. In its report on youth employment, the Bank of Korea said the nation’s youth (aged 15-29) unemployment rate reached 8.0 percent in 2013. This figure was lower than in major European economies. The youth unemployment rate was 42.4 percent in Spain, 29.6 percent in
Government to sell Woori Bank to group investors

Jul 21, 2015

The financial authority decided to sell its dominant stake in Woori Bank to a group of investors, scrapping its earlier stance to find a single bidder.The number of investors is expected to be set at between three and 10 on the basis of a split-based holding among a group of oligopolistic stakeholders, according to the Public Fund Oversight Committee.The PFOC, an arm of the Financial Services Commission, Tuesday unveiled its revised method to sell the state-controlled bank. This marked the fifth
Banks’ overseas performance below expectations

Jul 20, 2015

For domestic banks, overseas expansion has often been mentioned as a future growth engine and a significant tool to overcome sluggish growth and low interest margin in the saturated local market. However, the actual results of their yearslong investments appear to have fallen far short of initial expectations.The overseas profits made by South Korean banks last year werer visibly lower than that by Japanese and Australian banks, according to a report by the Hana Institute of Finance on Monday. A
Part-time labor market gets harsher on slow economy

Jul 20, 2015

By Chung Joo-won The growth of Korean part-timers’ monthly income in the second quarter slowed to a three-year low, an online job-matching portal revealed Monday.Alba Paradise chief executive Choi In-nyeong said, “In general, the growth of part-timers’ income and average hourly pay had been far faster than the minimum wage.”“But this year, their monthly and hourly wages grew slower, most likely because the slow economy cut down on the demand in the part-time labor market,” he said.According to a
Won-dollar rate hits 2-year high

Jul 20, 2015

The U.S. dollar’s globally strong positon is pulling down the Korean won’s value, with the won-dollar exchange rate reaching its highest point since July 8, 2013.The dollar rose 4.6 won from the previous trading session to close at 1,152.1 won on Monday.The exchange rate ― amid growing expectations of a rate hike in the U.S. later this year ― is likely to surpass 1,161.4 won reached on June 24, 2013, in the coming weeks, some local currency dealers predicted.If it breaks through the barrier, the
NongHyup Bank sees profit jump by 150% in H1

Jul 19, 2015

South Korean agriculture cooperative-based NongHyup Bank saw its first-half net profit jump 150 percent from the previous year, meeting its target amount for the first time in years, officials said Sunday.The bank recorded 300.2 billion won ($262 million) in net profit in January-June, up 180 billion won or 150 percent from the same period last year. Of the amount, 213 billion won or 71 percent of its 290 billion won target was achieved in the second quarter.“Despite challenges, we met the due t
KDB, EXIM step out to solve DSME debt crisis

Jul 19, 2015

Korea Development Bank and the Export-Import Bank of Korea, the country’s two key state-run banks, have started a large-scale debt restructuring process for Daewoo Shipbuilding & Marine Engineering.Last week, the country’s second-largest shipbuilder reported a loss of 2 trillion won ($1.7 billion) in the second quarter. Liquefied Natural Gas carrier built by Daewoo Shipbuilding &Marine Engineering.KDB, which is DSME’s largest shareholder with a 31.46 percent stake, pledged to normalize the compa
[Graphic News] South-North Korean economic gap widens

Jul 19, 2015

Major economic indicators show that the economic gap between South and North Korea is widening.According to data released by the Bank of Korea in Seoul last week, North Korea’s nominal gross national income came in at 34.2 trillion won ($29.8 billion) last year, which is roughly 2.3 percent of South Korea’s 2014 GNI of 1,496.6 trillion won. North Korea’s nominal GNI per capita also stood at 1.39 million won, meaning an average North Korean individual produces approximately 4.7 percent of what th
NPS to invest 1 tln won in overseas hedge funds next year

Jul 19, 2015

South Korea's national pension fund plans to make its first investment in overseas hedge funds next year as part of efforts to secure stable returns, an internal document from the fund showed Sunday. According to the 2016 asset allocation plan obtained by Yonhap News Agency, the National Pension Service will invest 1 trillion won ($870 million) in overseas hedge funds in 2016 out of its overall idle funds valued at 86.5 trillion won. As of end-2016, the state pension manager's investment in ov
Seoul shares to move in tight range next week

Jul 18, 2015

South Korean stocks are likely to trade in a narrow range next week as the second-quarter earnings season kicked off on a downbeat note, analysts said Saturday. The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,076.79 on Friday, spiking 2.24 percent from a week earlier.The index climbed as the Greek debt deal and the rebounding Chinese market lifted investor sentiment, which was corroborated by a landmark deal on Iran's nuclear program on Wednesday. With uncertainties in the g
Pension service to spin off fund management unit

Jul 17, 2015

South Korea’s Welfare Ministry is planning to turn the National Pension Service’s fund management unit into a separate public firm as part of its plan to revamp the pension program amid rapid population aging.According to the Health and Welfare Ministry, the state-run Korea Institute for Health and Social Affairs will announce the plan for restructuring the governance of the state pension program on Tuesday.The plan to spin off the fund management division is aimed at tackling the pension progra
South-North economic gap widens further

Jul 17, 2015

By Chung Joo-wonNorth Korea’s gross national income reached 34.2 trillion won ($29.8 billion) last year, about 2.3 percent of that of South Korea, data showed Friday. According to the Bank of Korea’s report on the North Korean economic growth in 2014, the communist nation’s nominal GNI per capita stood at 1.39 million won, meaning an average North Korean individual produces approximately 4.7 percent of what the average South Korean does.Meanwhile, North Korea’s trade volume in 2014 amounted to