Investigations into Shinhan Financial Group by the prosecution and the financial regulators over a series of alleged wrongdoings may damage the lender’s credit rating this year, market insiders said Wednesday. They said Shinhan Financial would have to be wary of another downgrade in its credit rating this year, following a case from its embezzlement scandal in 2010.Their negative outlook on Shinhan Financial ― though it posted the highest earnings among Korea’s financial firms last year ― is bas

The nation’s leading cyber-settlement provider recently informed its some 17 million customers of the growing risk of their accredited certificates being stolen for financial fraud.The figure accounts for around 75 percent of Korea’s financial consumers who hold Internet banking accounts.In an email to consumers, the Korea Financial Telecommunications & Clearings Institute said that Internet banking users should be particularly cautious about a “new type of phishing” scam.KFTC said the practice

The distressed savings bank industry is expected to face another round of business suspension for some players, as the overall secondary banking sector saw its financial status worsen last year.According to the Financial Supervisory Service, four of the 16 savings banks that publicized their 2012 financial statements declared “entire” capital erosion.The four banks in complete capital impairment, whose equity levels fell below zero under heavy losses, were Hyundai Swiss, Shilla, Youngnam and Woo

Foreign banks operating in Korea appear to have scrapped their plan to offer more generous dividend payouts to main shareholders in the face of alleged opposition from the nation’s regulatory officials.Among the lenders are Standard Chartered Bank Korea and Citibank Korea, according to the Financial Supervisory Service.“Paying huge dividends to main shareholders ― more specifically to their parent groups in the U.S. and U.K. ― is spurring concerns about massive capital outflow and the local unit

A government-led task force plans to seek close coordination with global rating agencies in a bid to prevent Korea’s credit status from being downgraded in the wake of North Korea’s nuclear test.The task force is drawing up contingency plans to effectively weather the North’s provocation and held an emergency meeting early on Wednesday.The task force is composed of senior officials from the Finance Ministry, the Financial Services Commission, the Financial Supervisory Service and the Bank of Kor

Prosecutors have again placed former Shinhan Financial Group chairman Ra Eung-chan under investigation for his alleged embezzlement into a slush fund.The prosecution recently launched an investigation into the allegation that a slush fund totaling 300 million won ($278,000) ― fostered by Ra ― was offered to then-lawmaker Lee Sang-deuk, brother of President Lee Myung-bak, in 2008.The allegation was made by civic group Solidarity for Economic Reform that Ra had ordered Shinhan Bank’s then-CEO Lee

The nation’s financial regulator is poised to reprimand Citibank Korea for having been negligent in consumer protection.Officials at the Financial Services Commission are fine-tuning the draft on a sanction against the local unit of U.S.-based Citigroup, which was created by the Financial Supervisory Service.The FSS, an executive arm of the FSC, has already decided to issue a “cautionary warning” on Citibank Korea CEO Ha Yung-ku and an “institutional warning” on the commercial lender.Consumers s

Three major foreign cigarette producers in Korea have yielded some of their market share to Korean brand KT&G, following their hike of prices for their products.According to cigarette industry data, the three players ― Philip Morris, British American Tobacco and Japan Tobacco International ― posted 35.3 percent in combined market share in January, down from 40.4 percent from a year before.Philip Morris reported a drop from 22.7 percent in January 2012 to 19.3 percent in January 2013. The shares

Credit card firms threatened to suspend payment services for customers “based on interest-free installment” later this month yet again, in response to retailers’ refusal to share “marketing event expenses.”Samsung, Hyundai, Hana SK and Lotte will halt the interest-free payment services starting on Feb. 17 with the other two ― BC and KB Kookmin ― following suit at the end of this month.While the credit card industry called on retailers to account for at least 50 percent of interest costs offered

Commercial banks’ profitability and earnings fell to their lowest since the 2009 global financial crisis due mainly to low interest rates.According to the Financial Supervisory Service, Korean banks saw their three major indices for profitability mark a three-year low in 2012.“The banking industry reported a worse performance in three indices ― return on assets (0.49 percent), return on equity (6.41 percent) and net interest margin (2.1 percent),” the FSS said in a statement.The weak profitabili

South Korean stocks ended almost flat on Wednesday as the prolonged currency volatility and North Korea’s threat of a nuclear test continued to weigh down the market, analysts said. The local currency fell against the U.S. dollar.The benchmark Korea Composite Stock Price Index shed 0.1 percent, or 1.99 points, to 1,936.19. Trading volume was moderate at 342.9 million shares worth 3.5 trillion won ($3.3 billion) with gainers outpacing losers 461 to 338.“Despite the gains on Wall Street overnight,

The nation’s financial regulator has bolstered its monitoring on conglomerates’ transactions with subcontractors amid the Korean won’s strong position against the Japanese yen.The policy of the Financial Supervisory Service reflects worries over the possibility that big firms could hand over their losses from declining exports amid weaker price competitiveness to subcontractors.In the past, conglomerates changed their settlement currency from the won to the dollar in paying for subcontractors’ p