Top 10 conglomerates sit on record cash reserve

[THE INVESTOR] Cash reserves of the nation’s top 10 conglomerates reached an all-time high of 550 trillion won (US$490 billion) in June this year.

Barring Samsung and Hanjin, eight of the largest Korean chaebol -- Hyundai Motor, SK, LG, Lotte, POSCO, GS, Hanwha and Hyundai Heavy Industries -- saw their cash reserves up this year compared to the end of 2015.

Samsung, the nation’s largest conglomerate, reduced cash reserves 1.9 percent to 210.3 trillion won, making up almost half of the combined figure.

The No. 2 Hyundai Motor’s cash reserves increased 4.4 percent to 117.2 trillion won.

SK, No. 3, saw a slight 0.6 percent increase to 62.7 trillion won.

POSCO, LG, Lotte and Hyundai Heavy Industry held cash reserves of 47.1 trillion won, 44.6 trillion won, 30.6 trillion won and 14.8 trillion won, respectively.

Hanjin, hit hard by its ongoing restructuring, saw a whopping 22 percent plunge to 2.2 trillion won.

Across their subsidiaries, Samsung Electronics marked the largest 143 trillion won cash reserves, followed by Hyundai Motor with 52 trillion won, POSCO with 44 trillion won, Kia Motors with 20 trillion won and Hyundai Mobis with 19 trillion won.

Profit reserves and capital surplus, including cash, piled up internally after paying out dividends and bonuses, among other allocations. Groups say the amounts include planned investments.

The Korean government imposes a tax on excessive cash reserves, while offering incentives for those used for dividend payouts, wage increases or investments.

By Lee Ji-yoon (jylee@heraldcorp.com)