Nearly half of all South Korean financial firms are expecting weaker performances in 2012 primarily due to the global economic slowdown and rising household debt, a poll showed Sunday.
The survey on 250 financial firms by the Korea Chamber of Commerce and Industry showed 48.8 percent of the respondents saying they are bracing for lower results compared to 2011, with 26.8 percent forecasting conditions would remain unchanged from the year before.
Regarding companies that held pessimistic views, 2.8 percent claimed they are bracing for significant losses.
“Among the banks, brokerages, credit card companies, insurers and asset management firms checked, only 24.4 percent said business conditions will improve in the coming months,” the KCCI said in a press release.
The KCCI said 55.7 percent of local financial firms cited worsening economic conditions brought on by the eurozone crisis as the single largest contributor to lower performance, with 28.7 percent blaming the country’s ballooning household debt.
Others claimed that tighter regulatory control and persistent real estate market woes are likely to hurt financial firms in the new year.
The latest findings also showed that of the financial firms surveyed, 51.6 percent of card companies were bracing for tough overall conditions.
Of the banks polled, 16.4 percent predicted difficult management environment in 2012 vis-a-vis the year before, with negative numbers for brokerages and asset management firms standing at 12 percent each.
South Korea’s largest private economic organization, with some 135,000 members, added that 45.2 percent of financial firms believed conditions may improve in the second half after experiencing tough times in the first six months of this year.
Of the total, 26 percent did not think conditions would improve throughout the entire year.
Local financial firms said that because of general uncertainties and risks, gold and bank deposits would be the safest investments. This was followed by stocks and real estate.
The survey, meanwhile, showed that 52.4 percent of financial firms called for improving asset safety and soundness to overcome hard times, with 19.6 percent saying there is a need to develop cutting edge financial products and management knowhow. (Yonhap News)
