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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
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Oct 23, 2007
- FSC/FSS Announces "Roadmap for Advanced Financial Supervision" Aimed at Taking Korea’s Financial Supervision to the Next Level
- The Financial Supervisory Commission and the Financial Supervisory Service announced the formation of Committee for Advanced Financial Supervision jointly headed by Chairman/Governor Kim Yong-Duk and Vice President Choi Woon-Youl of Sogang University and the release of “Roadmap for Advanced Financial Supervision” following the Committee’s first meeting on October 22. The roadmap is a product of a public-private sector collaboration involving the FSC/FSS and 30 private sector representatives and experts from the academia, research institutes, the financial services industry, and civic organizations.The roadmap was initiated with the acknowledgement that the supervisory system— including the traditional approaches and practices—as well as the supervisory authorities’ organizational structure and human resources management has not satisfactorily kept up with the demands of the rapidly evolving market and is thus in need of change. The announcement of the roadmap, which coincides with the tenth anniversary of the creation of the FSS as a fully integrated financial supervisory authority, also comes amid a growing recognition that next three years may well prove pivotal for Korea’s prospect for emergence as Northeast Asia’s financial hub.Key Objectives under the RoadmapThe roadmap consists of five key policy objectives with 100 tasks (grouped into 12 areas) to be completed within the next three years as well as 30 performance measurement indices. The five key policy objectives outlined in the roadmap are (1) a fundamental shift in financial supervision, (2) responsive supervision, (3) support for business autonomy and innovation of financial institutions, (4) consumer and investor protection, and (5) confidence and trust in financial supervisory authorities.1. A Fundamental Shift in Financial SupervisionA fundamental shift and reorientation of financial supervision will be pursued. Currently, financial supervision takes a highly specific, rule-based approa
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Oct 18, 2007
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Sep 19, 2007
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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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Sep 03, 2007
- Bank Net Income: First Half, 2007
- Bank net income for the first half of 2007 totaled KRW9.92 trillion, up KRW1.88 trillion from KRW8.04 trillion a year earlier. Bank income for the first half of the year was helped by after-tax gains totaling KRW3.1 trillion from the sale of domestic banks’ equity stakes in LG Card (KRW2.9 trillion) and SK Networks (KRW200 billion). Excluding these gains, net income for the period totaled KRW6.8 trillion, compared with KRW7.2 trillion a year earlier.Whereas interest income rose 4.1% from KRW14.6 trillion to KRW15.2 trillion, non-interest income nearly doubled from KRW4.1 trillion to KRW8.1 trillion in the first half of the year on increased revenues from service fees and securities gains. Service fee income—including income from money transfer services, ATM and bancassurance sales—totaled KRW2.24 trillion, up from KRW1.94 trillion a year earlier.ROA for the first half of the year averaged 1.52%, compared with 1.41% a year earlier, but excluding the one-time gains realized from the sale of shares from debt-to-equity swaps ROA drops to 1.05%, lower than 1.25% for H1, 2006.The so-called structural profitability—a measures of profitability defined as bank income which is generated from operational activities and is both sustainable and recurring (Framework for the Assessment of Bank Earnings, BIS, 2002)—came to 1.47%, down from 1.62% a year earlier. A drop in net interest margin was the key factor for the lower profitability.* Please refer to the attached PDF for details.
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Aug 31, 2007
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Aug 30, 2007
- Mr. William A. Ryback, Former Deputy Chief Executive of Hong Kong Monetary Authority, to Join the Financial Supervisory Service
- The Financial Supervisory Service announced on August 30 the appointment of Mr. William A. Ryback, the former Deputy Chief Executive of Hong Kong Monetary Authority (HKMA), as Special Advisor to the FSS to help improve financial market regulation and foster global standards. The FSS expects Mr. Ryback to play an active role as well in helping the FSS strengthen its supervisory networks and cooperation with foreign regulators and international regulatory organizations.Mr. Ryback has extensive experience and expertise in banking supervision and international financial affairs from his thirty five years of professional career at the U.S. Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency. He also served as the Chairman of the Association of Supervisors of Banks of the Americas and a member of the Core Principles Liaison Group of the Basel Committee on Banking Supervision, and has over the years established strong ties and network with financial supervisors worldwide and multilateral organizations. Prior to the FSS appointment, Mr. Ryback worked as the Deputy Chief Executive of HKMA where he oversaw banking supervision and contributed to financial sector growth policies.Among others, the FSS expects Mr. Ryback to reinvigorate the ongoing preparations for the New Basel Accord as well as the FSS drive for deregulation and advanced financial supervision. With his strong ties and network with financial supervisors and international supervisory organizations, Mr. Ryback is also expected to make significant contribution to Korea’s financial hub initiative.Mr. Ryback will assume his duties at the FSS on October 22, 2007. Initially, he will act as Advisor to the Governor in international supervisory affairs such as the New Basel Accord and risk management in the banking sector. He is also expected to carry out special tasks on ongoing supervisory matters under the Governor’s direction. The FSS also announced that it will decid
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Aug 27, 2007
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Aug 24, 2007
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Aug 07, 2007
- Chairman/Governor Kim Yong-Duk Takes Office at Financial Supervisory Commission and Financial Supervisory Service
- The Financial Supervisory Commission and the Financial Supervisory Service announced that Mr. Kim Yong-Duk took office as the sixth Chairman and Governor of the Financial Supervisory Commission and the Financial Supervisory Service on August 6. Chairman/Governor Kim succeeds Mr. Yoon Jeung-Hyun, whose three-year term ended on August 3. Mr. Kim served as Economic Advisor to the President before assuming his new position.Chairman/Governor Kim began his career in public service at the Ministry of Finance and Economy (former Ministry of Finance) in May, 1977. After taking an overseas assignment as a Treasury Officer at the Asian Development Bank in 1982, Mr. Kim returned to the MOFE in 1989 and served at several key positions in international affairs and finance, including Secretary for Financial Affairs to the President, Director-General of International Finance Bureau, Deputy-Minister for International Affairs, and Commissioner of Korea Customs Service. In May, 2005, he was appointed Vice Minister of the Ministry of Construction and Transportation and served in that position until November, 2006, when he became Economic Advisor to the President.Chairman/Governor Kim graduated from Korea University with B.A. in Business Administration in February, 1974. He also received an MBA from Ateneo De Manila University during his tenure at the Asian Development Bank.* Please refer to the attached PDF for details.
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Jun 22, 2007
- FSC/FSS to Host Second Asian Forum of Insurance Regulators in Seoul
- The Financial Supervisory Commission and the Financial Supervisory Service will host the Second Asian Forum of Insurance Regulators (AFIR) in Seoul on June 27, 2007. AFIR is a gathering of insurance regulators from across Asia to promote regional dialogue and cooperation on insurance supervision and facilitate sound development of insurance markets throughout Asia. The first AFIR meeting was held in Beijing in October 2006, following a proposal by China Insurance Regulatory Commission in May 2005 to create a new forum to strengthen relations and cooperation among Asia’s regulators.Approximately thirty senior insurance supervisors from fourteen insurance supervisory authorities and the International Association of Insurance Supervisors (IAIS) are expected to participate in the Seoul meeting. The participating supervisors are China Insurance Regulatory Commission, Financial Supervisory Commission of Taiwan, Office of the Commissioner of Insurance of Hong Kong, Insurance Regulatory and Development Authority of India, Financial Supervisory Agency of Japan, Insurance Commission of Jordan, FSC/FSS of Korea, Monetary Authority of Macao, Bank Negara Malaysia, Insurance Board of Nepal, Saudi Arabian Monetary Agency, Monetary Authority of Singapore, Insurance Department of Ministry of Commerce of Thailand, and Ministry of Finance of Vietnam.Four separate sessions are planned throughout the day for discussions on risk-based supervision, insurance fraud, natural and man-made catastrophic disasters, and regional cooperation. The FSC/FSS plans to make presentations on Risk Assessment and Application System (RAAS)—a new tool implemented in April this year to better assess insurance companies’ risk profiles—and ongoing preparations for the adoption of risk-based capital. A proposal for the creation of a working group to improve solvency regime for insurance companies is also planned.* Please refer to the attached PDF for details.
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Jun 14, 2007
- Bank BIS Capital Ratios, March, 2007, and Implementation of Basel II Capital Accord
- Bank BIS Capital RatiosBank BIS capital ratios as of the end of March, 2007, came to 12.99%, up from 12.75% at end-2006. With bank net income totaling KRW6.6 trillion for the first three months of 2007, bank capital increased 5.0% or KRW5.9 trillion while risk-weighted assets grew 3.0%. Tier-1 capital rose 7.4% or KRW6.3 trillion, but tier-2 capital experienced a modest drop of 1.0% or KRW300 billion. The capital ratio jumped for 12 banks but fell for six others during the January-March period.Timetable for Basel II Capital AccordThe FSC/FSS is expected to finalize by the end of June new capital standards that will take effect beginning in January, 2008, under the Basel II capital accord (January, 2009, for advanced IRB approach). The FSC/FSS is also expected to commence the approval process for banks opting for IRB approach later this year.* Please refer to the attached PDF for details.
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May 25, 2007
- Chairman/Governor Yoon Jeung-Hyun to Hold Roundtable Meeting in London and Deliver Keynote Speech at IIF Spring Membership Meeting in Athens
- Chairman/Governor Yoon Jeung-Hyun of Financial Supervisory Commission and Financial Supervisory Service is scheduled to travel to Basel, London, and Athens from May 24 to June 3 to meet with high-level regulators, hold a roundtable meeting with senior executives of global financial firms, and deliver the keynote speech at the Spring Membership Meeting of the Institute of International Finance (IIF).In Basel, Chairman/Governor Yoon is expected to meet with Dr. Yoshihiro Kawai, Secretary General of the International Association of Insurance Supervisors (IAIS), for discussions on issues ranging from Asia’s insurance market development to progress with IAIS Multilateral Memorandum of Understanding initiative. Chairman/Governor Yoon also plans to hold a high-level meeting with BIS General Manager Malcolm Knight and Secretary General Stefan Walters of the Basel Committee for discussions on, among others, progress with Basel II and issues related to cross-border implementation of the new accord.During his stay in London, Chairman/Governor Yoon is expected to sign a Memorandum of Understanding on supervisory cooperation with Chairman Callum McCarthy of U.K. Financial Services Authority and meet with Dr. Chris Gibson-Smith, Chairman of London Stock Exchange, for discussions on global equity markets, exchange consolidation, and London’s success as a global financial center. A roundtable meeting with senior executives of international financial services firms that are active in Korea and throughout Asia is also scheduled in London. Chairman/Governor Yoon plans to stress the success Korea has had with deregulation, reinforcing market discipline, and improving the overall regulatory environment for foreign businesses and investors.In Athens, Greece, Chairman/Governor Yoon will deliver the keynote speech at the IIF Spring Membership Meeting before senior business executives of global financial firms. In his speech, Chairman/Governor Yoon is expected to emphasize the benefits
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May 17, 2007
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May 11, 2007
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Apr 05, 2007
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Mar 21, 2007
- Signing of Statement of Protocol with U.S. PCAOB
- The Financial Supervisory Commission and the Financial Supervisory Service announced the signing of Statement of Protocol (“Statement”) with the U.S. Public Company Accounting Oversight Board (PCAOB) on March 21. The Statement, signed by Mr. Yoon Jeung-Hyun, Chairman of the FSC and Governor of the FSS, and Mr. Mark Olsen, Chairman of the PCAOB, in Seoul, is intended to facilitate cooperation in matters related to the oversight of the auditors of both countries and thereby contribute to improved accuracy and reliability of audit reports.The Statement consists of four key provisions on cooperation relating to inspection, investigation, sanction, and confidentiality. In respect of cooperation in an inspection, the Statement provides that each regulatory authority may, on behalf of or in support of the other, review audit papers, conduct interviews of an audit firm’s personnel, and assess an audit firm’s quality control system. In determining sanctions for accounting firms that fall within the regulatory jurisdiction of both the FSC/FSS and the PCAOB, the Statement provides that each regulatory authority shall endeavor to take into account the laws and regulations of the other. In respect of confidentiality, the Statement calls on both the FSC/FSS and the PCAOB to hold confidential documents and information created or received in the course of cooperation.For the FSC/FSS, the signing of the Statement is the first ever with a foreign audit oversight authority, and the expectation is that the Statement will contribute to enhanced cooperation on the oversight of accounting firms between the two countries. With regulators elsewhere stepping up oversight of auditors of multinational companies whose securities are traded in their markets, the FSC/FSS will endeavor to enter into similar cooperative arrangements with other foreign regulatory authorities in order to avoid duplicate audit supervision and reduce compliance cost.* Please refer to the attached PDF for detail
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Mar 16, 2007
- Road Map for the Adoption of International Financial Reporting Standards
- The Financial Supervisory Commission held a ceremony together with Korea Accounting Institute on Thursday, March 15, to mark the announcement of the road map for the adoption of International Financial Reporting Standards (IFRS). Mr. Yoon Jeung-Hyun, Chairman of the FSC, gave the keynote address at the ceremony and noted that the road map marked a milestone in Korea’s embrace of global accounting standards. A number of dignitaries, including Sir David Tweedie, Chairman of the International Accounting Standards Board (IASB), and Mr. Tatsumi Yamada, a member of the IASB Board, also attended the ceremony to offer congratulatory remarks.Background of the IFRS road mapMuch progress has been made with the efforts to improve the accounting standards and strengthen the oversight of corporate financial reporting in the years following the 1997 financial crisis. But it has been generally assumed that the level of confidence of foreign investors and others in Korea’s corporate accounting has not matched the efforts undertaken thus far, in part because of accounting standards that differ from IFRS and other globally prevailing standards. With the globalization of capital markets and a growing need for accounting consistency worldwide, the road map the FSC announced on March 15 represents a major step forward that will significantly improve the comparability, the reliability, and the transparency of Korea’s corporate financial reporting in many meaningful ways.Outline of the IFRS road mapFinancial reporting under IFRS will be made mandatory for all listed companies.Simplified accounting procedures will be permitted for unlisted companies to avoid any undue compliance cost. Unlisted companies may also elect to issue financial statements under IFRS, but once IFRS is elected it may not be rescinded and replaced.Financial statements under IFRS may be reported beginning in 2009 (excluding financial service companies) and will be made mandatory for all listed companies beginning
