Press Releases - Financial Services Commission

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Oct 13, 2008

Domestic Banks’ Loan to Deposit Ratio

The Financial Services Commission and the Financial Supervisory Service hereby issue a correction to the inference several newspaper articles have recently made from a cursory look at Korean banks’ loan/deposit ratios that Korean banks are funding local lending with foreign borrowing.The won-denominated loan/deposit ratio (including CDs) of domestic banks was 103.2% at end-September, 2008. Because of their deposit-like characteristics, CDs are included in determining the loan/deposit ratio, as is the convention in many countries. They are also classified as liabilities and thus subject to strict reserve requirements under the Bank of Korea Act. It should also be noted that over-the-counter bank teller sale of CDs account for approximately 80% of the total and that the average maturity of the CDs sold over-the- counter is five months. Furthermore, the loan/deposit ratio drops to 85.0% if bank-issued bonds are included in the ratio computation, meaning funding from local sources easily exceed local lending.Thus, the inference drawn from Korean banks’ loan/deposit ratios, ex-CDs and bank-issued bonds, that domestic banks are funding home lending with foreign borrowing is erroneous because local deposits and CDs have been, and continue to be, the primary sources of local funding for Korean banks.* Please refer to the attached PDF below.
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Oct 09, 2008

FSC/FSS Response to October 8th International Herald Tribune Article “Korean banks forget mistakes”

In an October 8th article entitled “Korean banks forget mistakes” by Martin Hutchinson, the International Herald Tribune makes the following assertions:• As in 1997, the banks borrowed dollars to lend won. Now the won’s drop has brought a crisis.• Heavy domestic small business and credit card loan demand led Korean banks to incur short-term foreign currency liabilities of $45 billion at December 2007.Response to the assertion of Korean banks borrowing in dollars and lending in wonAs of end-June, 2008, Korean banks are mostly financing won-denominated loans (KRW873 trillion) with won-denominated deposits (KRW614 trillion), CDs (KRW129 trillion), and bond issues (KRW230 trillion). Foreign currency assets came to US$227.7 billion, which closely matched foreign currency liabilities of US$236.2 billion.* Please refer to the attached PDF below.
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Oct 09, 2008

News Briefing for Foreign Correspondents

Soundness of Domestic Banks- Korea’s banking sector is sound in terms of asset strength, capital adequacy, profitability, and other soundness measures. Domestic banks’ ROA and ROE ratios, at 0.88% and 12.53%, respectively, are in line with or better than many banks in the developed countries.- Domestic banks’ average delinquency rate has risen slightly from 0.70% at end- 2007 to 0.87% at end-September, 2008. The average coverage ratio (a measure of reserves against potential loan losses) of 197.1% and BIS capital ratio of 11.36% strongly suggest that domestic banks will be able to easily absorb loan losses.- The Korean won-based liquidity ratio was 107.7% at end-August, while foreign currency-based liquidity ratio was 100.5% at end-September, both higher than the recommended level of 100% and 85%, respectively.- The loan/deposit ratio (including CDs) stood at 103.2% at end-September, slightly lower than 105.4% at end-July. Because of their deposit-like characteristics, CDs are often included in determining the loan/deposit ratio (e.g., the U.S.). The over- the-counter sale of CDs accounts for approximately 80% of the total.- It has been reported that Korean banks are borrowing in dollars and lending in won. This is incorrect because local banks are mostly financing won-denominated loans with deposits, CDs, and won-denominated bond issues.- As of end-June, 2008, foreign currency assets came to US$227.7 billion, which closely matched US$236.2 billion in foreign currency liabilities.Household Mortgages- Bank household mortgage loans outstanding totaled KRW231.8 trillion at end- September.- In 2008, bank mortgage lending rose by roughly KRW1.4 trillion a month.- Mortgage loans are sound, particularly when the low loan-to-value ratio (47.0%) and delinquency rate (0.44%) and the high coverage ratio (311.7%) are taken into account.SME Lending- The growth of bank lending to small- and medium-sized enterprises (SMEs) has slowed somewhat since August. SME loans outstand
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Sep 10, 2008

Response to the September 10th Article in The Times “South Korea heads for black September with won problems"

Response to The Times Article “South Korea heads for black September with won problems", September 10, 2008
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Jun 19, 2008

Memorandum of Understanding between MEF of the Kingdom of Cambodia and FSC of The Republic of Korea

Memorandum of UnderstandingbetweenThe Ministry of Economy and Finance of the Kingdom of CambodiaandThe Financial Services Commission ofThe Republic of KoreaThe Ministry of Economy and Finance (MEF) of the Kingdom of Cambodia andthe Financial Services Commission (FSC) of the Republic of Korea (hereinafter referred to as the “Authorities”),Desiring to promote co-operation in the field of securities-related and insurancesupervision on the basis of equality and mutual benefit,Recognizing that such co-operation will promote economic co-operation andenhance the friendly relationship between the two countries,Have agreed as follows:Purpose and PrincipleArticle 11. The purpose of this Memorandum of Understanding (“Memorandum”) is tostrengthen co-operation between the two authorities in the field of securitiesrelatedand insurance supervision on the basis of equality and mutual benefit,within the scope of laws and regulations of the two countries.2. This Memorandum does not modify or supersede any laws or regulatoryrequirements in force in, or applying to, the Kingdom of Cambodia or theRepublic of Korea. This Memorandum sets forth a statement of intent, andaccordingly neither creates any enforceable rights nor obligations by theparties hereto and third parties. This Memorandum does not affect anyprovisions or arrangements under other Memorandums.3. The Authorities acknowledge that they may only provide information underthis Memorandum if permitted or not prevented under the applicable laws,regulations and requirements of the Kingdom of Cambodia or the Republic ofKorea, and if provision of such information does not negatively affect nationalinterest of either country.Scope of CooperationArticle 2The co-operation may include, in particular, the following forms:a) Sharing of supervisory information and other information on trends in thesecurities markets and supervision policies of the two countries;b) High level dialogue;c) Exchange of examination and supervision techni
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Jun 13, 2008

FSC/FSS to Host IAIS Triannual Meetings and Global Seminar in Seoul

FSC/FSS to Host IAIS Triannual Meetings and Global Seminar in SeoulThe Financial Services Commission and the Financial Supervisory Service will host the International Association of Insurance Supervisors (IAIS) Triannual Meetings and Global Seminar from June 16 to 20 at the Lotte Hotel in Seoul, Korea.Approximately 200 participants from home and abroad, including representatives from National Association of Insurance Commissioners of U.S., Financial Services Authority of U.K., Financial Services Agency of Japan, and International Monetary Fund, are expected to attend the Seoul meetings.The IAIS Triannual Meetings give insurance supervisors and market participants an opportunity to exchange views on issues of key concern in the insurance industry and global supervisory/regulatory standards. Four committee meetings—Executive Committee, Technical Committee, Budget Committee, and Implementation Committee—as well as seven subcommittee meetings—including Regional Coordination Subcommittee and Governance and Compliance Subcommittee—are planned throughout the week.The first Global Seminar will also take place from June 18 to 20, with the aim of facilitating understanding and implementation of insurance supervisory standards. Presentations on six topics—IASB Phase II Project on Insurance Accounting and IAIS’s Views on it, Three Solvency Guidance Papers Developed in 2007, Group Supervision, Reinsurance Mutual Recognition, Multilateral Memorandum of Understanding, and Asset Liability Management—will be given by distinguished speakers.Chairman Jun Kwang-Woo of the Financial Services Commission will deliver the welcoming remarks at the dinner held on June 17 and Governor Kim Jong Chang of the Financial Supervisory Service will give the opening address for the Global Seminar on June 18.* Please refer to the attached PDF below.
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Jun 02, 2008

The Plan for Privatization of KDB and Establishment of KDF

Ⅰ. Purpose◇ Privatization of KDB is not intended for restructuring of public companies. It is a progressive strategy to develop the financial industry into a new growth engine by turning it into a high value-added industry.◇ Korea Development Fund (KDF), an advanced market-friendly policy financing vehicle to be established with funds from KDB's privatization, will support promising SMEs. - The privatization initiative provides the optimal solution to realizing the national agenda of nurturing a competitive CIB (corporate and investment bank).ㅇ By combining KDB, which has a strong corporate bankingcapacity, with Daewoo Securities, Korea's leadingsecurities house, the foundation will be laid to secure a competitive investment bank.ㅇ Advancement of innovative value-added industries will take place by securing a competitive investment bank, which will act as a core intermediary of the capital market.* An investment bank that provides risk capital to innovative industries, which will be central to the future Korean economy, is a must. - The privatization of KDB will trigger reorganizationand further advancement of the financial industry.ㅇ Domestic financial institutions typically stay complacent in the limited domestic market, maintaining their retail banking-focused revenue structure.* Currently, competitiveness of domestic banks and securities firms is limited as they concentrate on retail-banking and brokerage fees, respectively.* Overseas assets of leading global investment banks are over 50% of their total assets (e.g. Citi: 51%, HSBC: 56%, UBS: 91%). Yet, the average figure for domestic banks in 2006 was only 2.5%.ㅇ KDBH itself will actively seek MA opportunities to develop into a global investment bank through diversification of revenue structure and expansion of overseas business. By presenting new business models, it will act as a benchmark for other financial institutions. ⇨ This will provide domestic financial institutions with a new impetus a
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May 29, 2008

Major meeting of FIUs in Korea progresses the fight against money laundering and terrorist financing

The Prime Minister of the Republic of Korea, His Excellency Mr. Han Seung-soo opened the annual meeting of the Egmont Group of financial intelligence units.The Egmont Group consists of 108 financial intelligence units (FIUs) from across the world. Financial intelligence units are responsible for following the money trail, to counter money laundering and terrorism financing. FIUs are an essential component of the international fight against money laundering, the financing of terrorism, and related crime. Their ability to transform data into financial intelligence is a key element in the fight against money laundering and the financing of terrorism.In reflecting on the commitment of continued support by the Republic of Korea, Prime Minister Han Seung-soo said, “the Egmont Group has played a key role in the AML/CFT collaboration among government agencies.”This year’s meeting represents a milestone for the Egmont Group. Hosted by the Korean Financial Intelligence Unit (KoFIU), headed by Commissioner Young Kwa Kim, the meeting, the first plenary meeting in Asia, was attended by approximately 250 people from over 85 Egmont members, five (5) candidate/observer FIUs, and numerous international bodies.Mr. William Baity, Chair of the Egmont Committee said “this meeting reflects the commitment of the Republic of Korea and this region in the fight against money laundering and terrorist financing.”During the meeting, the FIUs of Moldova and the Turks and Caicos Islands were admitted as new members of the Egmont Group.In expanding and systematizing the exchange of financial intelligence information and fostering better communications among FIUs, more than 30 bilateral cooperation agreements were signed between Egmont members.The importance of the meeting was highlighted by the attendance of the incoming president of the Financial Action Task Force (FATF), the global standard setter for anti-money laundering and countering terrorism financing. Mr. Antonio Gustavo Rodrigu
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Mar 19, 2008

Domestic Financial Institutions’ Bear Stearns-Related Credit Exposures and Supervisory Authorities’ Assessment

The Financial Services Commission and the Financial Supervisory Service held a joint meeting on March 18 to take stock of domestic financial institutions' Bear Stearns-related credit exposures and appraise the ongoing financial market developments at home and abroad. The meeting was chaired by FSC Vice Chairman Rhee Chang-Yong and concluded with an action plan to step up market monitoring.Bear Stearns-related exposureDomestic financial institutions' Bear Stearns-related exposure was estimated at KRW443.1 billion (approximately US$434 million). Bank exposures totaled about KRW40.0 billion, which included KRW30 billion in Bear Stearns's debt securities, KRW7 to 10 billion in synthetic CDOs, and KRW400 million in derivatives (futures and options). Securities companies' investment in ELS by Bear Sterns was estimated at KRW211.1 billion. For insurance companies, the total exposure was put at KRW192.0 billion-KRW122.0 billion in debt securities and KRW70.0 billion in securitized assets including CDOs and CLNs.Assessment and responseWith J.P.Morgan Chase's assumption of Bear Stearns' liabilities, losses to be incurred by domestic financial are expected to be immaterial. The affirmation of the credit ratings of J.P. Morgan Chase by Moody's on March 17 following the Bear Stearns takeover is also expected to boost the prospect for minimal losses for domestic financial institutions. In response to the ongoing turmoil in the global credit markets and its likely adverse impact on domestic financial institutions, the FSC and the FSS agreed to form a joint market monitoring task force to keep a close watch on financial market developments and step up monitoring of sector-specific risks. This will include identifying domestic financial institutions' exposure to non-Bear Stearns assets, funding conditions for foreign currencies, unwinding of yen-carry trades, asset-liability maturity mismatch, and roll-over ratios.* Please refer to the attached PDF below.
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Feb 18, 2008

DART to Be Upgraded to Give Investors Added Information on Registration Statement Filings and Noncompliance

An upgrade to the Data Analysis, Retrieval, and Transfer (DART)—the FSS online corporate disclosure filing system—is planned in order to give investors added information on registration statement filings and disclosure noncompliance. The upgrade is expected to go online some time in the second quarter this year.
Feb 13, 2008

Domestic Banks’ Net Income Estimated at KRW15.02 Trillion for 2007

Preliminary figures put domestic banks’ combined net income for 2007 atKRW15.02 trillion, up KRW1.44 trillion from KRW13.57 trillion for 2006. Bank net income for 2007 was boosted by after-tax gains totaling KRW3.4 trillion from the sale of shares in LG Card (KRW3 trillion), SK Networks (KRW200 billion), and others that domestic banks held from debt-equity swaps in previous years.Excluding these one-time gains, bank net income for 2007 drops to KRW11.65 trillion, compared with KRW12.04 trillion for 2006.Interest income for 2007 was estimated at KRW31.2 trillion, an increase of KRW1.7 trillion or 5.8% from 2006. Non-interest income on the other hand jumped KRW3.4 trillion or 45.1% to KRW10.8 trillion on the back of robust increases in commission and securities-related gains. Service fee income, mostly from money transfer and ATM services, fell from KRW776.8 billion in 2006 to KRW701.9 billion in 2007, down 74.9 billion or 9.6%. But commission income from the sale of funds and bancassurance increased KRW1.1 trillion to KRW2.8 trillion.Domestic banks’ ROA for the year averaged 1.10%, down slightly from 1.13% a year earlier; net of gains from sale of debt-equity swap shares, ROA for 2007 falls to 0.85%, compared with 1.00% for 2006. Net interest margin was estimated at 2.45%, compared with 2.64% for 2006 and 2.81% for 2005.* Please refer to the attached PDF below.
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Jan 23, 2008

Loan-Loss Provisioning to Be Adjusted for Credit Card Companies

The FSC/FSS plans to adopt regulatory changes that will raise provisioning forcertain classes of assets of credit card companies and incorporate a higher proportion of asset-backed securities in the computation of adjusted capital ratio. The new fine- tuning measures are intended to level uneven provisioning rules currently in place for banks and credit card companies and to ensure adequate provisioning as a cushion against losses.Provisioning rules for bank credit card assets have been reinforced in anticipation of the implementation of Basel II. In December, 2005, provisioning rules previously applicable only to the undrawn cash advance amount—total cash advances available to a credit card customer less the amount drawn or used—were extended to cover the total undrawn line of credit. In December, 2006, provisioning rate was raised from 1% to 1.5% for credit card assets classified as normal and from 12% to 15% for assets classified as precautionary. But these rule changes have not been extended to credit card companies.New provisioning rates for normal and precautionary assetsUnder the proposed changes, the provisioning rates applicable to credit card companies are to be raised from 1% to 1.5% for assets classified as normal and from 12% to 15% for assets classified as precautionary. The rates for the three other classes of assets—those classified as substandard, doubtful, and presumed loss—to remain unchanged at 20%, 60%, and 100%, respectively. These adjustments will mean that both banks and credit card companies will be subject to the same provisioning rates for their credit card assets.Provisioning for total undrawn line of creditProvisioning against undrawn cash advances is to be extended to cover the total undrawn line of credit given to credit card customers (same as bank credit card customers). The 0.5% provisioning rate currently in effect is also to be changed to the new provisioning rates to be applied to each of the five asset categories.Higher
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Jan 09, 2008

Bank BIS Capital Ratios, September, 2007, and Implementation of Basel II in 2008

BIS Capital Ratios, September, 2007Bank BIS capital ratios at end-September, 2007, averaged 12.71%, down modestly from 12.75% at end-2006. A 14.02% (KRW130.3 trillion) increase in risk-weighted assets led by loan growth of small- and medium-sized companies more than offset the 13.6% (KRW16.1 trillion) increase in bank capital and lowered the overall BIS ratio for the period.With bank net income totaling KRW13.2 trillion for the first nine months of the year, tier-1 capital rose 15.81% (KRW13.4 trillion) and tier-2 capital 8.01% (KRW2.7 trillion). Of the 13 commercial banks, the capital ratio rose for 8 banks but fell for 5 others during the January-September period.Basel II Implementation in 2008Implementation of Basel II is set to begin in 2008 as scheduled for domestic banks. Of the 18 domestic banks, Kookmin has received regulatory approval for the use of internal-ratings-based (IRB) approach; the 17 others are to begin with the standardized approach. Both the Industrial Bank of Korea and the Korea Development Bank are also working on regulatory approval for the use of IRB approach in 2009. As the implementation of Basel II progresses, the BIS capital ratios of domestic banks are expected to initially fall by one to two percentage points from the pre- Basel II ratios, a relatively minor drop given domestic banks’ robust accumulated net profits (estimated at KRW15.8 trillion for 2007) and the ample capacity to boost both tier-1 and tier-2 capital. Moreover, with a reduced risk weight (from 100% to 75%) for loans less than KRW1 billion to small- and medium-sized companies as well as other downward risk weight fine-tuning provided under the Basel II-based capital rules, domestic banks are not expected to see any material changes in their capital base. For the six regional commercial banks, the drop under Basel II is expected to be even smaller.With most domestic banks aiming for the adoption of advanced IRB currently set to be introduced in 2009, the implementatio
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Dec 24, 2007

Korea Accounting Standards Board Announces Korean Translation of International Financial Reporting Standards

The Korea Accounting Institute (KAI)/Korea Accounting Standards Board (KASB) released Korean translation of International Financial Reporting Standards (“K-IFRS”) in support of Korea’s full adoption of IFRS. The announcement of K-IFRS, a key implementation step of the IFRS roadmap that the FSC/FSS and KAI/KASB announced on March 15, marks the completion and acceptance of the translations of the 58 accounting standards and interpretations—37 standards and 21 interpretations—that will become Korea’s Generally Accepted Accounting Principles by 2011.Under the IFRS roadmap, financial reporting using IFRS is to become mandatory for all listed companies beginning in 2011. Consolidated quarterly and semiannual financial reporting is also set to take effect beginning in 2011 for companies with assets of KRW2 trillion or more (2013 for others).Although Korea has achieved a significant degree of consistency with international accounting standards as a result of harmonization efforts under way since 1999, the full adoption of IFRS is expected to bring about further benefits to business enterprises and investors at home and abroad. Among others, it will raise the transparency of Korea’s corporate financial reporting and thus improve investor confidence and the overall business climate at home. Internationally active domestic companies are also expected to benefit from reduced compliance cost at home and abroad as a direct result of financial reporting under a uniform set of rules provided by IFRS. With a particular focus on consolidated financial statements, IFRS is also expected to provide more useful and reliable information to investors than before.Effective date for IFRSThe new accounting standards are set to become mandatory beginning with the first accounting year after January 1, 2011. Companies may also opt to report financial statements under IFRS beginning with the first accounting year after January 1, 2009.Future TasksA number of legal and regulatory ch
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Nov 27, 2007

FSC/FSS to Host IOSCO Asia-Pacific Regional Committee on November 28

The Financial Supervisory Commission and the Financial Supervisory Service will host International Organization of Securities Commissions Asia-Pacific Regional Committee (IOSCO-APRC) and Roundtable Meetings on Wednesday, November 28, at the Lotte Hotel in Seoul.The IOSCO-APRC is one of four regional committees of IOSCO that focuses on regional issues in respect of securities regulation with 25 members representing securities regulators from 21 countries in the Asia-Pacific region. It is a high-level meeting of securities regulators in the region. It was held in Vietnam last year. At the Seoul meeting, about 50 senior securities regulators and representatives from OECD, ADB, and IOSCO are expected to take part.Following the APRC meeting led by Mr. Thirachai Phuvanatnaranubala, Chairman of IOSCO-APRC in the morning, three Roundtable Sessions will be held in the afternoon on (1) recent developments in securities supervision, (2) regulation of electronic trading systems, and (3) surveillance of private equity/hedge fund. The FSC/FSS will present its roadmap for the implementation of International Financial Reporting Standards (IFRS) and outline the Financial Investment Services and Capital Market Act (a.k.a. Capital Market Consolidation Act) set to take effect in February, 2009.* Please refer to the attached PDF for details.
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Nov 16, 2007

Fund Assets Under Management: October, 2007

Assets under management (AUM) of funds that invest at home and overseas totaled KRW330.8 trillion as of end-October, up sharply from KRW243 trillion at end-2006 and KRW218.2 trillion at end-2005. With surging stock markets at home and abroad, stock funds saw a KRW85.6 trillion increase in AUM since the beginning of the year.For funds that invest in overseas assets, AUM as of end-October came to KRW97.3 trillion, compared with KRW32.2 trillion at end-2006. The AUM of funds created in Korea accounted for KRW85 trillion of the total, compared with KRW19.3 trillion at end-2006. For offshore funds—those created outside Korea and sold to investors in Korea—the total was KRW12.3 trillion, down modestly from KRW13.5 trillion at end-May this year.Recent trends in fund investment1. The average investment-holding period in a fund jumped from 12.9 months in 2005 to 18.4 months as of end-September this year. The proportion of investor accounts with investment-holding period longer than 18 months came to 49.1% as of end-September and is likely to increase as more investors open installment plan accounts for stock investment. As of end-September, the number of stock installment plan accounts totaled 10.34 million with KRW34.5 trillion in AUM, compared with 6.43 million accounts with KRW21.9 trillion at end-2006 and 4.65 million accounts with KRW9.6 trillion at end-2005.2. The National Pension Service and many employer-sponsored retirement plans are increasingly turning to asset management companies for investment management, a development that bodes well for the future growth of the local asset management service industry. The NPS had KRW32.5 trillion under asset management companies as of end-September, up from KRW19.7 trillion at end-2006. For retirement plans, the figure jumped from KRW72.9 billion to KRW237.3 billion during the first nine months of 2007.3. Fund investment in China continued to pick up the pace in 2007 despite signs of overheated rush in Chinese markets. As
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Nov 06, 2007

Chairman/Governor Kim Yong-Duk Calls for Strong Bilateral Financial Services Investment between Australia and Korea before Australia’s Business Leaders

Chairman/Governor Kim Yong-Duk met with senior business executives from Australia’s financial services firms on November 5 at a meeting hosted by the Investment and Financial Services Association (IFSA) of Australia and called for strong bilateral financial services investment between Australia and Korea. The meeting was held in Sydney, the first leg of Chairman/Governor Kim’s overseas trip in Australia and Japan.
Oct 18, 2007

Bank BIS Capital Ratios, June 2007

Bank BIS capital ratios as of the end of June, 2007, averaged 12.87%, compared with 12.75% at end-2006. With bank net income totaling KRW9.9 trillion for the first six months of the year, bank capital increased 10.16% (KRW12.0 trillion) while risk-weighted assets grew 9.16% (KRW85.2 trillion). Tier-1 capital rose 12.49% (KRW10.6 trillion), but tier-2 capital showed a smaller increase of 2.01% (KRW700 billion). The capital ratio jumped for eight banks but fell for the ten others from end-2006.* Please refer to the attached PDF for details.
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Sep 19, 2007

Updated English Translation of Supervisory Regulations to Go Online September 20, 2007

The Financial Supervisory Service announced that newly updated English translation of supervisory regulations will be available online beginning September 20, 2007. The translation, which covers the entire 43 supervisory regulations currently in effect, can be accessed free of charge at the FSS English Internet homepage (http://english.fss.or.kr) under “Laws and Regulations.”As follow-up steps, the Financial Supervisory Service also expects to regularly update the English translation and provide additional translations such as FAQ on the supervisory regulations and staff interpretations and opinions on regulatory and supervisory matters.The English translations are part of the ongoing effort by the Financial Supervisory Service to help improve foreign investors’ and businesses’ access to and understanding of Korea’s financial regulations. The translation service is also aimed at facilitating a more effective and transparent regulatory environment as Korea strives to make the transition to Northeast Asia’s financial hub.* Please refer to the attached PDF for details.
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Sep 17, 2007

Financial Holding Companies' Net Income: First Half, 2007

The net income of the four domestic financial holding companies—Woori Financial Group, Shinhan Financial Group, Hana Financial Group, and Korea Investment Holdings—totaled KRW4.02 trillion on a consolidated basis for the first six months of 2007, an increase of KRW1.10 trillion or 37.8% from the same period a year earlier. Excluding the one-time gains (KRW1.17 trillion in pretax income) from the sale of shares in LG Card by the holding companies, net income for the period drops to KRW3.17 trillion.ROA rose modestly for Woori, Shinhan, and Hana but fell for Korea Investment. Excluding LG Card-related gains, ROA fell compared to the same period a year earlier.As of end-June, 2007, assets of the four financial holding companies totaled KRW589.8 trillion on a consolidated basis, up KRW74.5 trillion from the same period a year earlier. Most of the asset increase resulted from the takeover of LG Card by Shinhan (KRW9.8 trillion), growth of loans to small- and medium-sized companies (KRW46.2 trillion), and increases in securities assets.In terms of group assets, banking constituted the largest asset for Woori (89.6%), Shinhan (83.4%), and Hana (94.9%). For Korea Investment Holdings, securities businesses made up 91.3% of the group assets.* Please refer to the attached PDF for details.
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