The Korea Herald

Hana Financial picks deputy president as new bank chief

Feb 9, 2015

Hana Financial Group has appointed Hana Bank’s deputy president Kim Byoung-ho as the new chief of its flagship bank. Kim Byoung-hoThe group’s executive candidate selection committee, after shortlisting three candidates and interviewing two, recommended Kim for the vacant president post, officials said Monday. The appointment was confirmed at the board of directors and shareholders’ meeting.Kim has been serving as deputy president and acting president, since former chief Kim Jong-jun stepped down
Korea to plow W84b into farming fund

Feb 9, 2015

The Ministry of Agriculture, Food and Rural Affairs plans to invest 84 billion won ($76.6 million) in a “MAFRA Fund of Funds” this year to foster the nation’s food and farm industries, officials said Monday.The ministry said that it would use 50 billion won from state funds and collect the remainder from the private sector. It plans to invest the money in investors’ cooperatives or private equity funds. Ministry officials said the corpus would be invested in six funds, yet to be created within t
Rapid transformation of KB Financial

Feb 9, 2015

KB Financial Group, Korea’s leading financial institution with the largest customer base, is undergoing rapid transformation since its new management changes last year.In less than a month after Yoon Jong-kyoo was elected chairman and CEO of the group, decision-making has been quick, such as in buying LIG Insurance Co., restructuring its organization, moving its holding company into the KB Bank building in Yeouido ― the financial district in Seoul ― and supporting fintech.There are also moves to
[Herald Interview] Olympus Capital seeks diversification

Feb 9, 2015

Private equity fund eyes agribusiness, clean energy and financial services
Household tax burden doubles income gains

Feb 9, 2015

The tax burden on average Korean households increased twice as fast as their income did in the first three quarters of last year, Statistics Korea said Monday.The statistics bureau said two-person households each earned an average of 4.3 million won a month between January and September 2014, up 3.6 percent from the same period a year ago.Meanwhile, those households each paid monthly taxes of about 154,276 won, up 5.9 percent from a year ago.Taxes included regular direct taxes such as income and
Banks outdone by insurers in net profit

Feb 9, 2015

South Korean banks were most likely outdone by local insurers in terms of net profit last year for the first time in the country's financial history, industry data indicated Monday, with market watchers placing the blame on the lenders for the reversal.Eighteen local lenders, including No. 1 commercial bank Shinhan Bank and state-run Korea Development Bank, posted a combined 6.2 trillion won ($5.7 billion) in net income in 2014, according to the data.Net profit of 56 life and non-life insurers c
FSC loses face over KB, Hana feuds

Feb 8, 2015

The Financial Services Commission, the nation’s top regulator, appears to be losing face lately as its position on key financial issues are being repeatedly contradicted by legal authorities.It was especially blamed for breaking neutrality and interfering in the KB Financial Group’s internal leadership feud last year as also Hana Financial Group’s ongoing management-labor dispute over its merger with Korea Exchange Bank.FSC chairman Shin Je-yoon was grilled by opposition lawmakers during the par
Seoul shares likely to move in tight range this week

Feb 8, 2015

South Korean stocks are expected to continue range-bound trading this week following last week’s flat market, as lack of momentum will persist with jitters over the Greek debt issue in the eurozone, analysts said. The benchmark Korea Composite Stock Price Index closed up 0.32 percent Friday at 1,955.52 from a week ago. The main index started off the week higher on the back of a foreign inflow on anticipation that the eurozone would salvage Greece from a potential default by injecting liquidity.
[Weekender] The changing landscape of Korea’s housing market

Feb 6, 2015

Home ownership no longer a symbol of wealth and pride
[Weekender] Jeonse, a keystone of Korea’s economic history

Feb 6, 2015

Jeonse, a system that allows people to rent houses with a lump-sum deposit and no monthly payments, is a real estate system unique to South Korea.The system arose due to the lack of mortgage availability in Korea, which pushed people to turn to jeonse as a form of private financing, and spurred by the general expectation for rising real estate prices, which allows property owners to profit without charging interest.But some claim that the history of jeonse dates back to before industrialization
[Herald Interview] ‘Korea needs new perceptions, tools for housing market’

Feb 6, 2015

Korea needs to use the financial resources of the private sector and new, innovative tools to sustain the real estate market for long-term stability, according to Jin Chang-ha, a Hanyang University professor who specializes in real estate finance and investment.The market is facing a paradigm shift, with “jeonse” leases ― lump sum deposits in lieu of rent ― quickly being replaced by rental agreements. In this situation, financial tools such as real estate investment trusts or funds via public-pr
[Herald Interview] ‘Jeonse is fading out of the market’

Feb 6, 2015

Korean tenants have traditionally preferred fixed “jeonse” leases to more expensive monthly rents, but increasingly they are feeling the pinch, as the supply of jeonse properties dries up. Son Jae-young, professor at Konkuk University’s Real Estate Department.According to property market expert Son Jae-young, Koreans may have to accept the system’s disappearance. Jeonse is not a welfare system, he points out but was designed on economic grounds, and market conditions may mean it will fade away.“
[Weekender] Gosiwon reflects changing housing culture

Feb 6, 2015

In terms of uniquely Korean housing culture, one can’t leave out the humblest abode: the “gosiwon,” a low-cost, sparsely furnished, month-to-month rental room that does not require a deposit.The hallway of a typical gosiwon (jointroom.com)A typical gosiwon room, with basic furniture squeezed into about 4 square meters (gosiwonhome.com)A gosiwon, a residential room as tiny as 3.5 square meters, is furnished with a desk, bookshelf and bed. The business originally took off to temporarily accommodat
Local banks’ net profit jumps 60 percent

Feb 6, 2015

Banks saw their net profit soar 60.4 percent in 2014 from a year ago, largely resulting from the reduced provision of bad loans, the financial authorities said Friday. The combined net income of 18 banks operating here stood at 6.2 trillion won ($5.7 billion) in 2014, up 3.9 trillion won from a year earlier, the Financial Supervisory Service reported. The financial watchdog said the lenders’ provision of bad loans dropped to 8.9 trillion won last year, down 24.9 percent on-year from 11.9 trillio
KOSDAQ breaches 600

Feb 5, 2015

A KRX official monitors the tech-heavy KOSDAQ on Thursday. (Yonhap)The tech-heavy Korean Securities Dealers Automated Quotations index broke the 600 mark for the first time in six years on expectations of strong growth among small and medium tech enterprises.The KOSDAQ finished at 600.81, up 2.58, or 0.43 percent. The tech index had been trapped below the 600 threshold since the index hit 602.74 on June 26, 2008. The country’s benchmark KOSPI closed at 1,952.84, down 9.95 or 0.51 percent.The KOS