Journalist

Kwon Ga-lim
  • Rising Delinquencies and Bigger Provisions Cloud South Korean Banks’ Profits
    Rising Delinquencies and Bigger Provisions Cloud South Korean Banks’ Profits Rising loan delinquencies and heavy provisioning are weighing on South Korea’s banks, even as they step up efforts to sell off bad loans. Analysts say asset-quality management is being tested because new delinquencies are increasing faster than banks can dispose of nonperforming loans. According to the financial sector on Monday, banks sold 8.1 trillion won ($8.1 trillion) worth of NPLs last year. Banks typically classify loans delinquent for more than three months as NPLs and, when recovery looks unlikely, sell them to securitization firms to manage delinquency ratios. But delinquency rates have been slow to fall despite aggressive NPL cleanups, as newly delinquent loans are growing faster. Data from the Financial Supervisory Service showed the delinquency rate on won-denominated bank loans stood at 0.50% at the end of last year, the highest since the end of 2015 (0.58%). The corporate-loan delinquency rate rose to 0.59%, up 0.09 percentage points from a year earlier. With banks expected to expand corporate lending this year under a “productive finance” policy push, they are likely to build additional provisions. NPL sales aimed at maintaining asset quality could also increase. NPL sales in the first half are estimated at 4 trillion won, and the annual total is expected to exceed last year’s level. A larger volume of NPL sales can also cut net profit. When bad loans are sold below book value, banks record losses equal to the discount. Some in the industry warn that a full-scale push into corporate lending starting this year could lead to a stronger profit hit in coming years as NPLs rise. “NPL volumes won’t surge immediately, but they could gradually increase in a few years due to factors such as a prolonged economic slowdown,” a financial industry official said. “If net profit falls as a result, it could disrupt value-up plans and business strategy.” Other pressures on earnings are also growing, including fines tied to equity-linked securities and contributions to the Korea Inclusive Finance Agency. Fines for five banks that sold ELS — KB Kookmin, Shinhan, Hana, NH NongHyup and SC First Bank — are expected to be finalized at about 1.4 trillion won on Tuesday. As of the end of last year, KB Kookmin Bank had booked 263.3 billion won in provisions for the ELS fines but will need to add more than 500 billion won. Shinhan Bank and Hana Bank set aside 152.7 billion won and 92.0 billion won, respectively. The provisions are expected to be recorded as nonoperating expenses, weighing on net profit. From the second half of next year, banks will no longer be allowed to include statutory costs — such as reserve requirements, deposit insurance premiums and contributions to the Korea Inclusive Finance Agency — in the add-on spread used to calculate lending rates, adding to pressure on earnings. “If additional real estate rules are introduced, such as banning loan extensions for owners of multiple homes, borrowers could leave and banks could lose growth opportunities,” another financial industry official said. “Capabilities such as corporate analysis systems and long-term delinquency management will determine survival.” 2026-02-24 15:33:00
  • Korean Financial Holding Shares Surge as Employees and CEOs Cash In on Stock Gains
    Korean Financial Holding Shares Surge as Employees and CEOs Cash In on Stock Gains As bank stocks climb sharply amid a broader rally that has pushed the Kospi to the 5,800 level this year, more bank employees are selling company shares. Workers who bought employee stock for loyalty reasons or to claim up to 4 million won in annual income deductions are taking profits as prices hit levels they have not seen since joining their firms. Paper gains have also grown for chief executives who bought shares as part of efforts to show management accountability. According to the financial industry on the 23rd, Woori Financial Group’s employee-shareholding ratio fell to 7.78% in December from 7.88% in the third quarter of last year. The ratio is expected to edge down again in the first quarter. Employee shares can be sold after being withdrawn from the employee stock ownership association into an individual brokerage account, and the withdrawn shares are typically sold on the market. The selling is widely attributed to a recent surge in prices as bank stocks have been cited as beneficiaries of the Kospi’s rise to the 5,800 range. KB Financial Group shares rose to 168,700 won on the day from 82,000 won on Feb. 24 last year. Over the same period, Shinhan Financial Group climbed 116% to 101,800 won from 47,200 won, and Hana Financial Group jumped 107% to 129,100 won from 62,500 won. Woori Financial Group advanced to 40,300 won from 17,420 won. Many bank employees buy about 300,000 to 400,000 won worth of company shares each month, often for tax-deduction purposes. With prices soaring, sales have increased, contributing to a decline in employee-shareholding ratios at major financial holding firms, including Woori Financial. “Employee shares are usually intended for long-term holding, and selling at a peak can be treated as income and may mean paying more tax,” a financial industry official said. “Taking that into account, there is movement to sell at an appropriate level.” CEOs who bought shares to underscore accountability have also seen their paper gains swell. Shinhan Bank CEO Jeong Sang-hyeok holds 15,551 shares of Shinhan Financial. He bought 2,000 shares in January last year at 48,400 won per share, for a gain of 106.8 million won compared with the price at the time of purchase. KB Financial Chairman Yang Jong-hee bought 5,000 shares in March 2024 at 77,000 won per share. With the stock topping 160,000 won on the day, his paper gain reached 458.5 million won. Hana Financial Chairman Ham Young-joo bought 5,000 shares in December 2024 at 58,862 won, for a gain of 351.19 million won. Woori Financial Chairman Lim Jong-ryong, who bought 10,000 shares in September 2023 at 11,880 won, posted a gain of 284.2 million won. Financial holding firms expect shares to rise further and plan to step up outreach to overseas investors. Working-level staff at major groups are expected to meet with JPMorgan staff visiting South Korea in early March to present value-up policies and strategies for new businesses such as stablecoins. 2026-02-23 16:15:00
  • KB Kookmin Bank, LG Uplus to Showcase AI Voice Phishing Response Model at MWC26
    KB Kookmin Bank, LG Uplus to Showcase AI Voice Phishing Response Model at MWC26 KB Kookmin Bank said it will present a strategic cooperation model with LG Uplus at MWC26, the world’s largest mobile exhibition, set to open March 2 (local time) in Barcelona, Spain. The model outlines an “AI-based finance-telecom real-time response collaboration system” to combat voice phishing. The partnership goes beyond a technology tie-up, the bank said, and is aimed at putting into practice its strategy to upgrade its voice phishing monitoring system and strengthen real-time response capabilities. In a demonstration, KB Kookmin Bank’s enhanced monitoring system will link in real time with LG Uplus’ AI calling app, ixi-O, and its voice phishing prevention service. If suspicious signs are detected during a call, related information will be sent immediately to the bank’s monitoring system. The bank can then take rapid steps such as freezing the account or shifting it to intensive monitoring. The bank said its future security model focuses on prevention rather than after-the-fact action, with the carrier and bank operating like a single system at the moment criminals try to induce a transfer to block potential financial losses. “Based on cooperation between the two companies, we expect to speed up the response needed to block voice phishing,” a KB Kookmin Bank official said. “We will continue to build innovative security infrastructure to protect financial consumers.”* This article has been translated by AI. 2026-02-23 09:18:00
  • Woori Bank teams with Samsung Electronics and LG Uplus to market to teens and 20-somethings
    Woori Bank teams with Samsung Electronics and LG Uplus to market to teens and 20-somethings Woori Bank said on the 20th it signed a joint marketing agreement with Samsung Electronics and LG Uplus to attract customers in their teens and 20s. Attendees included Woori Bank CEO Jeong Jin-wan, Samsung Electronics Korea Vice President Lim Seong-taek and LG Uplus Vice President Lee Jae-won, along with other officials from the three companies. The partnership brings together leaders in finance, mobile devices and telecommunications to offer financial services tailored to the lifestyle of younger customers. Under the agreement, the companies plan joint marketing and promotions aimed at the 10-20 age group, promote the “Samsung Wallet Money” service, and offer special handset sales to Woori Bank customers. The effort will focus on practical benefits for customers accustomed to mobile and simple payments. “This collaboration combines financial services with mobile and telecom services to provide a differentiated experience for younger customers,” Jeong said. He added the bank plans to keep expanding touchpoints with younger customers through strategic partnerships across industries. * This article has been translated by AI. 2026-02-20 14:06:28
  • BNK Kyongnam Bank Launches Productive Finance Council, CEO Kim Tae-han to Lead
    BNK Kyongnam Bank Launches Productive Finance Council, CEO Kim Tae-han to Lead BNK Kyongnam Bank said Thursday it has launched a “Productive Finance Implementation Council.” The council is chaired by Kyongnam Bank CEO Kim Tae-han and is made up of four groups: the Innovation Growth Finance Center, the Innovation Finance Support Division, the Future Growth Investment Division and the Regional Value-Up Division. The council held its first meeting at the bank’s headquarters, attended by Kim, division heads and department leaders. Agenda items included sharing the status of key productive and inclusive finance initiatives, advancing external activities such as business cooperation agreements (MOUs) with institutions and local governments, and refining the organization’s operating structure. The bank said it will strengthen funding support for local industries and companies and seek opportunities to participate in policy and state-led projects to help foster and revitalize region-specific industries. The bank also said it is actively promoting “regional productive finance,” a 4.3 trillion won program that broadly supports future-growth and innovative companies, region-specific industries, and local self-employed business owners and small and midsize firms. Under the plan, the bank will provide tailored financing by growth stage for leading local companies and firms relocating to the region, including facility investment and trade finance, overseas expansion and shared growth with partner companies. It will offer additional interest-rate discounts to ease financing burdens for 11 advanced strategic industries, including artificial intelligence, semiconductors, secondary batteries, robotics, and aerospace and defense. It also plans to expand support for regional specialized industries such as maritime, shipbuilding, defense, logistics and aerospace. “For regional growth, we need a productive finance model that creates value beyond the scale of financial support,” Kim said. “As a reliable partner that grows with the region, we will continue to do our best to create regional value.” * This article has been translated by AI. 2026-02-20 13:42:00
  • New IBK CEO Jang Min-young Pledges 300 Trillion Won in ‘Productive Finance’ and AI Shift
    New IBK CEO Jang Min-young Pledges 300 Trillion Won in ‘Productive Finance’ and AI Shift ‘A 37-year IBK veteran,’ new IBK Industrial Bank of Korea CEO Jang Min-young began his official duties on Feb. 20, calling for the bank to serve as a catalyst for “productive finance.” He said IBK will expand financing for small and midsize businesses amid low growth and industrial restructuring, while overhauling the bank through AI-driven digital transformation and stronger internal controls. “At a time when our economy faces structural crises of low growth and polarization, we are also confronting upheaval from AI, digital change and an energy transition,” Jang said at the inauguration ceremony. “IBK must play the role of a catalyst for productive finance.” He named three core management priorities: productive finance, trust-based finance and digital transformation. “Over the past 65 years, IBK’s corporate-finance DNA built alongside small and midsize companies is a unique asset no one can replicate,” he said, pledging to “push ahead without disruption” with 300 trillion won in productive finance by 2030. Jang also called for expanding investment in new industries. “With a trained eye, we will identify future industries such as AI and semiconductors and powerfully activate our growth engine,” he said. He pledged broad financial support tailored to a company’s life cycle, “from early-stage startups through growth and maturity.” On digital transformation, Jang said he wants to redefine IBK as an “AI company.” “We will secure AI-based, best-in-class capabilities across all areas and realign our organizational DNA to be AI-friendly,” he said, adding that the bank will combine long-accumulated data with AI to upgrade credit reviews and soundness management. He also described stablecoins as a key technology that could change the capital paradigm and said the bank will review adopting related systems, with safety as a prerequisite. Jang emphasized a shift to trust-based finance as well. “We will build an internal control system that can proactively manage even unseen risks,” he said, signaling tighter risk management. He added that IBK faces the challenge of competing on equal footing with commercial banks while balancing public and commercial roles, and said he will foster a culture of mutual respect and discussion. The ceremony was held about a month after his appointment on Jan. 23, after the bank’s labor union staged a campaign to block employees from reporting to work over overtime pay issues tied to a total wage cap system. Labor and management agreed on Feb. 19 to normalize unpaid allowances, easing the dispute and allowing the bank to move toward normal operations. For his first official schedule, Jang plans to visit a Seoul branch with heavy customer traffic to encourage staff. With his term starting later than planned, he also aims to accelerate the 300 trillion won productive-finance initiative. The government’s National Growth Fund is also expected to expand IBK’s role in areas such as balanced regional development and support for advanced strategic industries, and some observers say his capital-markets background could speed up decisions on large-scale fund investments. Asset quality management is also cited as a key task. Analysts say the bank must stabilize a delinquency rate that rose into the 1% range in the third quarter of last year while continuing support for small merchants and small and midsize businesses. How the new leadership balances expanded support with risk controls is expected to be an early test. * This article has been translated by AI. 2026-02-20 11:09:00
  • KB Kookmin Bank Union Faces Impeachment Bid Against Chair After Labor Deal
    KB Kookmin Bank Union Faces Impeachment Bid Against Chair After Labor Deal KB Kookmin Bank’s labor union has finalized its 2025 wage and collective bargaining agreement, but an unprecedented move to impeach the union chair is now being raised. The push comes after a majority of members voted against the tentative deal, yet the chair moved ahead with it under his authority. The union says it is prepared to take the dispute to court over issues including bonuses that have already been paid, signaling the conflict could drag on. According to the financial industry on Thursday, the union has formed an emergency committee and will begin voting Feb. 23 on whether to file an impeachment motion against union chair Kim Jeong. If at least one-third of members agree, the motion can be formally submitted. After a motion is filed, the chair must convene the impeachment decision-making body within two weeks. If at least two-thirds of members vote in favor, the chair must step down. Members’ anger centers on Kim’s decision to implement compensation based on the tentative agreement despite its rejection. In a second vote held Feb. 11, 5,443 of 9,369 members voted against the deal, defeating it. The tentative agreement included a 3.1% wage increase (3.3% for contract workers), a profit-sharing bonus (P/S) of 300%, a special incentive payment of 7 million won, elimination of the P/S cap and a plan to rebuild the profit-sharing system within three quarters, and a 4.9-day workweek that includes leaving work one hour early on Fridays. Internal dissatisfaction remained over the raise and the compensation structure. Kim, who won reelection last month, had made “up to 600% in bonuses” a key campaign pledge, which the union said helped drive the majority “no” vote. Even so, Kim pushed the agreement through, citing the approaching Feb. 13 deadline for paying bonuses to employees taking voluntary retirement, despite the deal being rejected twice. The union said, “Even after an overwhelming majority opposition was confirmed twice in a membership vote, Kim trampled members’ will with a single statement and forced the agreement through,” calling it “a serious matter that undermines the foundation of democratic legitimacy.” In a statement issued Wednesday, Kim said, “As the payment deadline for our retired seniors drew closer, my heart burned, and I ultimately made a lonely and heavy decision with the resolve to bear all criticism alone.” He added, “As chair, I cannot wash away with any excuse that I did not fully follow members’ wishes, and I will not avoid responsibility but face it head-on.” The infighting could also spill into legal action. With the profit-sharing bonus already paid after Kim moved ahead, some observers say a court is less likely to grant an injunction to invalidate the agreement. The union, however, believes it could still prevail in a lawsuit on the merits. 2026-02-20 08:30:00
  • SC First Bank Launches Smart Box Checking Account With Rates Up to 5%
    SC First Bank Launches Smart Box Checking Account With Rates Up to 5% SC First Bank said Wednesday it is running a sign-up promotion for its “SC First Smart Box Account,” a demand deposit product offering rates of up to 5%. The account automatically splits the daily balance in half and applies different rates to the Smart Box portion and the Basic Box portion. On the Smart Box portion — half of the balance — customers can earn a preferential rate of 3.0% to 5.0% depending on conditions. The remaining half, the Basic Box portion, earns a base rate of 0.3%. The Smart Box portion starts with a 3.0% preferential rate, with additional boosts of 1.0 percentage point for first-time SC First Bank customers, 0.5 point for a Smart Box balance of at least 100 million won, 0.2 point for marketing consent and 0.3 point for payroll deposits. Interest on the Smart Box portion is compounded daily, with principal and accrued interest added each day and treated as the next day’s principal. To receive the Smart Box rate, the Smart Box portion must be at least 1 million won; there is no maximum limit. For example, a first-time customer who deposits 200 million won would be eligible for up to 5.0% on the Smart Box portion of 100 million won, depending on conditions, while the remaining 100 million won in the Basic Box portion would earn 0.3%. “Smart Box Account is a demand deposit product that automatically manages half of the daily balance at a higher rate,” said Jeong Jae-won, head of SC First Bank’s secured lending and deposit products division. He said it could be “a reasonable choice” for customers looking to manage spare cash in a volatile market. 2026-02-19 15:12:51
  • Shinhan Bank, Hyundai Engineering & Construction Sign Deal to Expand Productive Finance
    Shinhan Bank, Hyundai Engineering & Construction Sign Deal to Expand Productive Finance Shinhan Bank said Tuesday it signed a memorandum of understanding with Hyundai Engineering & Construction to expand cooperation aimed at boosting what it called “productive finance.” The signing ceremony was held at Hyundai E&C’s headquarters in Seoul and attended by Shinhan Bank CEO Jeong Sang-hyeok and Hyundai E&C CEO Lee Han-woo. The companies said they will jointly review financing options tailored to each project’s characteristics and funding needs and set up a working-level cooperation system to broaden support. Under the agreement, Shinhan Bank will strengthen financial cooperation across Hyundai E&C’s businesses, including data centers, renewable energy, infrastructure and environmental projects, and power brokerage trading. The bank said it plans to support funding through project-specific financial advisory services, arranging financing and linking investments. The two sides also agreed to step up information sharing during project execution and work together to develop financial products and customized solutions suited to each project. A Shinhan Bank official said the partnership will help identify strong projects and provide tailored financial solutions so financing leads to investment and growth in the real economy.* This article has been translated by AI. 2026-02-18 16:06:00
  • Bank Credit Loan Rates Return to 4% Range After 14 Months, Raising Borrower Costs
    Bank Credit Loan Rates Return to 4% Range After 14 Months, Raising Borrower Costs Minimum interest rates on credit loans at major South Korean commercial banks have climbed back above 4% for the first time in 14 months, adding pressure on borrowers who have relied on debt to invest or buy homes. According to the financial sector on Tuesday, credit-loan rates at the four biggest commercial banks — KB Kookmin, Shinhan, Hana and Woori — stood at 4.010% to 5.380% as of Feb. 13 for top-tier borrowers with one-year maturities. The lower end of the range, which had stayed in the 3% range since December 2024, returned to the 4% range after 14 months. Compared with Jan. 16, the lower end rose 0.260 percentage points and the upper end gained 0.150 points. The move was attributed to faster increases in short-term bank bond yields, which are used as benchmarks for credit loans. As of Feb. 13, the five-year bank bond yield — a key reference for fixed-rate mortgages — rose 0.107 percentage points from the previous month, while the one-year bank bond yield, a major benchmark for credit loans, climbed 0.158 points. With mortgage rates already elevated, the rise in credit-loan rates could further increase repayment burdens, the report warned. Even if tighter rules cool mortgage lending, a pickup in unsecured credit could become a new trigger for household debt growth. Minimum mortgage rates moved into the 4% range late last year and have continued to rise. As of Feb. 13, mixed-rate mortgages at the four banks were 4.360% to 6.437%, with the lower and upper ends up 0.230 and 0.140 percentage points, respectively. Adjustable-rate mortgages that reset annually were 3.830% to 5.731%, with both ends up about 0.1 point. Borrowers using overdraft-style credit lines, known as “minus accounts,” are expected to feel the impact more sharply. These products have a much higher share of floating rates than standard credit loans, and customers repeatedly borrow and repay within their limits. With rate cuts seen as unlikely in the near term, borrowers’ interest costs are expected to rise further. Credit lending has also been increasing recently amid demand for investment funds, including for stocks. As of Feb. 12, outstanding credit loans at the five major banks — KB, Shinhan, Hana, Woori and NH NongHyup — totaled 104.8405 trillion won, up 95 billion won from the previous month. Overdraft balances hit a roughly three-year high of 40.0837 trillion won at the end of November, eased to the 39.7 trillion won range at the end of December and in January, then rebounded to the 39.8 trillion won range this month. A financial industry official said credit loans typically decline early in the year as bonuses are paid, but this year some demand appears tied to investment amid a strong stock market, including the KOSPI’s move above 5,000. “If credit lending rises while rates are increasing, borrowers’ interest burdens could grow if the market corrects or rates climb further,” the official said. * This article has been translated by AI. 2026-02-18 16:03:00